NEW: AmFree Urges Illinois Court to Stop State Interference In National Banking System

In Amicus Brief, highlights damaging impacts of state interference in National Bank Act, writing: “banks, their customers, and the economy at large would suffer” under new IL interchange law

In case you missed it, the Center for Legal Action (CLA) for the American Free Enterprise Chamber of Commerce (AmFree) filed an amicus brief in the continuing lawsuit against the Illinois Interchange Fee Prohibition Act (IFPA), which directly interferes with our national banking system. CLA’s brief labeled the IFPA an “economic threat” and details the “devastating damage” it would impose on consumers and businesses:

“State interference with the National Bank Act creates a patchwork of regulations that undermines the efficiency and predictability of the national banking system. This fragmentation not only increases operational costs for banks but also limits consumer access to credit and other financial services.”

The brief argues the legal concept of preemption – when federal law must take precedence over conflicting state law – is critical to maintaining uniformity and stability in the banking system and must be protected. Ignoring preemption, the brief explains:

1. Threatens our nation’s system of federally chartered banks. “The imposition of state-specific regulations on national banks disrupts the uniform regulatory framework established by the National Bank Act, leading to operational inefficiencies and increased costs that ultimately harm the banking system as a whole.”
2. Harms consumers the most. “Consumers bear the brunt of state interference through higher fees, reduced access to credit, and inconsistent protections, which create confusion and inequality in the financial marketplace.”

The amicus brief calls for a reaffirmation of the preemptive authority of the National Bank Act to ensure a consistent and stable regulatory environment for national banks.

“Left unchecked, the IFPA would not only inflict untold consumer harm in the form of increased fees, but also take the nation backwards to a Civil War era patchwork banking system marked by instability and confusion,” said Machalagh Carr, Director of AmFree’s Center for Legal Action. “For more than a century and a half, the nation has benefited from the National Bank Act and its ensuing uniformity and stability. Now politicians in the land of Lincoln are seeking to unwind this progress and damage banks, their customers, and the economy in the process.”

To read the full amicus brief from Center For Legal Action, click here.

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