Big banks sue Illinois over first-of-its-kind change to credit card fees – Crain’s*

Trade groups representing banks and credit unions are suing the state of Illinois over a new law that would exempt state and local taxes and tips from the interchange fees charged by credit-card processors. Bankers were surprised by the law, which emerged at the 11th hour of this year’s budget session in Springfield. Lawmakers decided to reduce the interchange fees,largely paid by merchants, on credit- and debit-card transactions as a way to soften the blow of a new law that would generate $100 million in state revenue by reducing the amount of money paid to merchants for collecting state and local sales taxes.