Swipe law will hurt local businesses

In neighborhoods across Illinois, your local community bank or credit union is more than a place to cash a check or apply for a loan. It’s one of the few places still investing in the people, families and small businesses working every day to build a better future. The Interchange Fee Prohibition Act, set to take effect July 1, threatens to make that harder.

This law will create new burdens for community banks, credit unions and the small businesses that depend on them, especially minority-owned and Black-owned businesses already fighting to grow on tight margins with limited access to investment.

We’re already seeing how it creates clear winners and losers. A recent ruling from the Office of the Comptroller of the Currency makes it clear that many of the country’s biggest banks won’t have to follow this law, but smaller community banks and credit unions will. And when those local institutions are forced to carry the burden, it’s the neighborhoods and small businesses who depend on them that end up paying the price.

In many underserved neighborhoods, those local institutions aren’t just another banking option, they are the only option. They’re the banks families and small businesses depend on. They’re the financial partners still investing in communities too often overlooked by larger corporations.

The impact of this law won’t stop at the bank counter. Small businesses, workers and families will feel it through fewer banking services, more complicated payment systems, less investment in local neighborhoods and fewer opportunities for families and entrepreneurs trying to move forward.

Lawmakers should act now to repeal the Interchange Fee Prohibition Act before it harms community banks, small businesses and the communities that depend on them.

Larry Ivory, President and CEO

Illinois State Black Chamber of Commerce