--- title: "United States – Illinois Payments Regulation Monitor | World Payments Monitor" canonical: https://payments.gi/jurisdictions/united-states-illinois/ source_html: /jurisdictions/united-states-illinois/index.html description: "United States – Illinois payments and e-money regulation: 14 modules, 64 sourced findings, updated 2026-10-26. Licensing, safeguarding, stablecoins, AML/CFT." generated_at: 2026-10-26T19:20:26Z content_sha256: ca157551e17a420def697b19edd8ccde739afcae189828fcb1021cbd4cebf827 generator: "fe-fleet/md-twin@1.0" --- # United States – Illinois US-IL schema world-payments-v1 trajectory: not yet assessed Last updated 2026-10-26 · 14 modules · 64 sourced findings · 216 sources in the cumulative register Download report (PDF) Expand all 14 Modules 0 Moved this cycle 1 Key judgments 2 Open gaps 64 Findings 91 Tier-1 sources Confidence mix 9 confirmed 5 unpopulated (sums to 14 rendered modules; click to filter) No modules moved this cycle. United States federal law that applies in United States – Illinois is covered once, on the [United States](/jurisdictions/united-states/) page. This page covers United States – Illinois’s own layer: its own law, regulators and enforcement. ## Jurisdiction brief Jurisdiction lead brief 979 Full executive summary 634 ###### Latest update · 25 October 2026 #### Lead Signal The Seventh Circuit Court of Appeals has consolidated two new cross-appeals in Illinois Bankers Association v. Raoul, the litigation over Illinois' Interchange Fee Prohibition Act, by order dated October 16, 2026. The consolidated appeals (Nos. 26-3082 and 26-3106) will be briefed and decided together; the Attorney General's opening brief is due November 23, 2026, with oral argument expected before the end of February 2027. This follows a June 1, 2026 district-court ruling that permanently enjoined the Act's interchange-fee limitation as applied to national banks, federal savings associations, out-of-state state banks, and payment card networks, a ruling that itself followed the Office of the Comptroller of the Currency's April 2026 interim final rule addressing the same question. Illinois-chartered state banks and credit unions remain subject to the fee limitation; the IFPA's separate data-usage limitation was permanently enjoined as applied to covered federally regulated entities. The practical effect is a fee regime that currently applies differently depending on an institution's charter type, with the scope and durability of that split now before the appellate court. #### Other Developments No other payments-regulatory development reaching the material-content threshold was identified for Illinois in the window under review. Licensing and market-access conditions, conduct and safeguarding rules, stablecoin and digital-money activity, operational resilience requirements, scheme and network compliance, corridor dynamics, industry-structure developments, merchant-acquiring conditions, product-innovation activity, consumer-protection and fraud rules, AML/CFT requirements, correspondent-banking arrangements, and commercial-intelligence events each carried no qualifying finding for Illinois this period. #### Cross-Monitor Connections The interchange-fee litigation sits squarely within payments regulation and does not, on current evidence, connect to a digital-asset registration, sanctions, or data-protection development tracked elsewhere for Illinois this period; those are separate regulatory threads proceeding on their own timelines. #### Outlook The near-term marker is the Attorney General's opening brief, due November 23, 2026, followed by briefing from the plaintiff banking associations and payment card networks, with oral argument before the Seventh Circuit expected before the end of February 2027. Until that argument and the resulting decision, the current split compliance landscape, fee limitation enforceable against state-chartered banks and credit unions, enjoined as to nationally chartered and federally regulated entities and networks, persists unchanged. 5 earlier updates not shown here. ###### Standing brief · as of 19 August 2026 Written before the update above. Where they differ, the update is the more recent position. #### Lead Signal A five-month sequence of federal-state confrontation over Illinois's Interchange Fee Prohibition Act (IFPA) has split the law's practical reach along the bank-versus-nonbank line that increasingly defines U.S. payments regulation. On February 10, 2026, the Northern District of Illinois, in a ruling by Chief Judge Kendall, upheld the IFPA's core interchange-fee limitation but permanently enjoined the data-usage limitation as applied to national banks, federal savings associations, federal credit unions, and certain payment networks. The Office of the Comptroller of the Currency then escalated the conflict directly: on April 24, 2026 it issued an Interim Final Rule and Interim Final Order concluding that federal law preempts the IFPA in its entirety for national banks and federal savings associations, effective June 30, 2026. The Seventh Circuit responded on May 8, 2026 by vacating the district court's February judgment and remanding the case in light of the OCC's action. On remand, the district court moved on June 1, 2026 to permanently enjoin the IFPA's core interchange-fee limitation for national banks, federal savings associations, federal credit unions, out-of-state state banks, and payment card networks acting on their behalf. The Illinois General Assembly, acting the same day, passed SB 3645, delaying the IFPA's general effective date by one year, from July 1, 2026 to July 1, 2027, for all financial institutions. Taken together, the OCC's preemption action and the injunction on remand substantially neutralize the IFPA for the federally-regulated entities that process the overwhelming majority of card volume, while non-federally-regulated entities remain nominally subject to the law's now-delayed 2027 effective date. The OCC's order draws on a primary regulatory bulletin and carries this monitor's highest source-tier rating, and the interpreter rates the combined preemption-and-injunction development as CRITICAL impact for this jurisdiction's legal and litigation tracker. #### Other Developments Illinois has also overhauled its money-transmission licensing regime on a separate track. The Uniform Money Transmission Modernization Act (205 ILCS 658) replaced the prior Transmitters of Money Act effective January 1, 2026, standardizing money-transmission licensing, examination, and prudential requirements and introducing a mandatory NMLS electronic surety bond regime. The Illinois Department of Financial and Professional Regulation notified licensees of the bond mandate on September 30, 2025. This item is sourced from a Tier-4 commercial explainer rather than a primary statutory or regulator publication, a gap worth closing in a future cycle. The licensing overhaul and the interchange-fee litigation are legally unconnected, but together they describe a state regulator tightening its non-bank oversight architecture even as its bank-facing interchange-fee statute is being hollowed out by federal preemption. #### Cross-Monitor Connections The interchange-fee sequence sits inside the same bank-versus-nonbank access asymmetry that recurs across this monitor's licensing and correspondent-banking coverage: federally-chartered entities have now secured a preemption shield that non-federally-regulated market participants do not share. This cycle's research pass did not independently re-verify stablecoin-regime or AML/CFT findings for this jurisdiction, both of which are populated here from adjacent monitors rather than first-party world-payments research; any illicit use of interchange-fee data or money-transmission channels remains a matter for the financial-integrity monitor, not a conclusion drawn in this brief. #### Outlook The date to watch is July 1, 2027, when the IFPA's core interchange-fee and data-usage limitations become generally applicable to entities not covered by the OCC's preemption order and the injunction issued on remand, per SB 3645's one-year delay. Whether that produces a durable two-tier regime — preempted for federally-regulated entities, pending for everyone else — or invites a further round of litigation before the new effective date arrives will determine how much of Illinois's interchange-fee framework survives in practice. Read full brief · 979 words ###### Latest update · 25 October 2026 #### Regulatory Status The defining payments-regulatory development for Illinois this period is procedural rather than substantive: the Seventh Circuit Court of Appeals consolidated two new cross-appeals in Illinois Bankers Association v. Raoul by order dated October 16, 2026, setting a path for combined briefing and disposition of challenges to the Illinois Interchange Fee Prohibition Act. This sits atop a June 1, 2026 district-court ruling that permanently enjoined the Act's interchange-fee limitation as applied to national banks, federal savings associations, out-of-state state banks, and payment card networks, following the Office of the Comptroller of the Currency's April 2026 interim final rule on the same question. Illinois-chartered state banks and credit unions remain subject to the fee limitation; the Act's separate data-usage limitation was permanently enjoined as to the same covered federally regulated entities. The result is a charter-dependent compliance split that currently governs interchange-fee obligations in the state, with its ultimate scope and durability now before the appellate court. No other Illinois payments development, across licensing, stablecoin activity, operational resilience, scheme compliance, corridor dynamics, industry structure, merchant acquiring, product innovation, consumer protection, AML/CFT, correspondent banking, or commercial intelligence, met the material-content threshold this period. #### Outlook The Attorney General's opening brief is due November 23, 2026, with oral argument before the Seventh Circuit expected before the end of February 2027. Until that argument and the resulting decision, Illinois' charter-dependent interchange-fee compliance split, binding on state-chartered banks and credit unions, enjoined as to nationally chartered and federally regulated entities and networks, remains the operative state of the law. 1 earlier update not shown here. ###### Standing brief · as of 19 August 2026 Written before the update above. Where they differ, the update is the more recent position. #### Regulatory Status Illinois enters this reporting cycle as the most active U.S. jurisdiction on this monitor, driven by two independent developments: a federal preemption fight over the Interchange Fee Prohibition Act (IFPA) and a full replacement of the state's money-transmission licensing statute. On the litigation side, a district court ruling in February 2026 partially upheld the IFPA before the Office of the Comptroller of the Currency preempted the statute outright for national banks and federal savings associations on April 24, 2026, prompting the Seventh Circuit to vacate and remand on May 8, 2026 and the district court to permanently enjoin the law's core interchange-fee limitation for federally-regulated entities on June 1, 2026. The Illinois General Assembly responded the same day by delaying the IFPA's general effective date by one year, to July 1, 2027, for all financial institutions. On the licensing side, the Uniform Money Transmission Modernization Act (205 ILCS 658) replaced the Transmitters of Money Act effective January 1, 2026, standardizing money-transmission licensing, examination, and prudential requirements and introducing a mandatory NMLS electronic surety bond regime that the Illinois Department of Financial and Professional Regulation flagged to licensees on September 30, 2025. Read together, these two developments describe a jurisdiction whose payments-regulation direction is fragmenting rather than converging: bank-facing interchange-fee regulation is being rolled back by federal preemption even as non-bank money-transmission oversight is being tightened and standardized. The jurisdiction's overall risk posture this cycle is elevated and its regulatory trajectory is escalating, reflecting the pace and magnitude of the federal-state conflict over the IFPA in particular. #### Outlook July 1, 2027 is the key date for Illinois's payments-regulation calendar: the IFPA's general effective date, as delayed by SB 3645, at which point its core limitations become applicable to any entity not already covered by the OCC's preemption order and the injunction on remand. Coverage gaps remain for this jurisdiction on instant-payments corridor development and merchant-acquiring-specific enforcement activity, and no first-party stablecoin or AML/CFT findings were generated for Illinois this cycle; those tracks were populated, where present, from adjacent monitors rather than original world-payments research. Read full brief · 634 words × 14 of 14 modules Signal Moved Judgment Gap Density Comfortable Compact Expand all sources Reset all Selections OR within a group, AND across groups. Press / to search. ### W1aLicensing, Authorisation & Market Access1 gapConfirmedconfirmed 2026-07-04▾# Illinois replaced its Transmitters of Money Act (205 ILCS 657) with the Uniform Money Transmission Modernization Act (205 ILCS 658, P.A. 103-991) effective 2026-01-01, tightening surety-bond (electronic bonds now mandatory in NMLS), net-worth and permissible-investment requirements for IDFPR-licensed money transmitters. Digital assets are explicitly carved out of the MTMA's 'money' definition and instead regulated under DACPA (205 ILCS 731) and DAKA (205 ILCS 732). Open gap — wpm-int-1 No Illinois-specific licensing, stablecoin, scheme, corridor, merchant-acquiring, product-innovation, APP-fraud, correspondent-banking or fintech-M&A development was found within the Oct 18-25 window. Emerging-market rails and cross-border remittance corridor specifics remain under-indexed for this JID; consider a targeted search of Illinois-licensed remittance corridor-specific guidance next cycle. Horizon · 2027-07-01 (± a quarter) DACPA digital asset business registration deadline Adopted, not yet in force · Tier 3 source Horizon · 2027-01-01 (± a quarter) DACPA custody/disclosure milestone Adopted · Tier 3 source Horizon · 2027-07-01 (± a quarter) DACPA full licensing effective Adopted · Tier 3 source Horizon · 2026-10-20 (± a quarter) MTMA/DACPA/DAKA JCAR Second Notice hearing Consultation · Tier 1 source Standing sub-brief · as of 19 August 2026 297 words · last cycle 2026-10-18 #### Licensing, Authorisation & Market Access Illinois's non-bank money-transmission framework was rebuilt at the start of this year. The Uniform Money Transmission Modernization Act (205 ILCS 658) replaced the prior Transmitters of Money Act effective January 1, 2026, standardizing money-transmission licensing, examination, and prudential requirements across the state's non-bank payments sector. The reform's most operationally significant element is a mandatory NMLS electronic surety bond regime, which the Illinois Department of Financial and Professional Regulation flagged to licensees on September 30, 2025 ahead of the January 1 changeover. This licensing overhaul sits entirely on the non-bank side of the bank/nonbank divide that runs through this jurisdiction's regulatory year: money transmitters and other non-bank payment-institution licensees face a materially standardized and more heavily documented licensing and bonding regime, distinct from the bank-facing interchange-fee dynamics playing out in parallel under W7. This item is drawn from a Tier-4 commercial-explainer source rather than a primary statutory or regulator publication, and is assessed at 'Assessed' rather than 'High' confidence as a result; a future cycle sourcing IDFPR's own statutory or bulletin-level material on UMTMA would strengthen the evidentiary basis for this standing item, particularly given its relevance to adjacent financial-integrity monitoring of money-transmission licensing. #### Outlook With UMTMA now in force, the near-term monitoring question is implementation: how the electronic surety bond mandate is enforced against existing license holders through 2026, and whether IDFPR issues further interpretive guidance on the examination and prudential standards the Act introduces. No further UMTMA-related developments were identified this cycle beyond the January 1, 2026 effective date itself. Together, the interchange-fee neutralization for banks and the licensing standardization for non-banks make Illinois this cycle's most active U.S. state across the licensing and litigation trackers, even though the two developments run on independent legal tracks and affect different regulated populations. Read full sub-brief · 297 words Periodic update · new data 2026-10-18 #### Licensing, Authorisation & Market Access Illinois' money-transmission licensing framework is mid-transition. The Uniform Money Transmission Modernization Act rules, codified at 38 IAC 207, moved to Second Notice as published at 50 Illinois Register 6739, with a Joint Committee on Administrative Rules hearing scheduled for 20 October 2026. Notably, this hearing is scheduled alongside the separate DACPA and DAKA digital-asset rules, suggesting a coordinated effort to reconcile the money-transmission licensing perimeter with the newer digital-asset licensing framework rather than developing the two in isolation. The prior licensing statute, the Transmitters of Money Act (205 ILCS 657), is confirmed repealed effective 1 January 2026. Existing licensees under that prior statute are permitted to continue operating under the old rules until their licence renewal date or six months after the 1 January 2026 effective date, whichever is later, providing a defined transition runway rather than an abrupt cutover. This transition structure applies specifically to the nonbank payment-institution and e-money-institution licensing track; the record does not indicate a materially different transition requirement for bank-affiliated money transmitters this cycle. #### Outlook The JCAR hearing on 20 October 2026 will determine whether the Second Notice MTMA amendments proceed toward adoption on the current timeline. Money transmitters still operating under the repealed Transmitters of Money Act should track their individual licence renewal dates against the six-month transition deadline to determine which governs their specific migration timeline to the modernised licensing framework. 4 earlier distinct update(s) Periodic update · new data 2026-10-11 #### Licensing, Authorisation & Market Access Illinois's general money-transmission licensing baseline is the Uniform Money Transmission Modernization Act (205 ILCS 658), which replaced the former Transmitters of Money Act effective 1 January 2026, with a transition period provided for existing licensees. Non-bank payment institutions and e-money issuers operating in Illinois continue to be licensed under this Act by the Illinois Department of Financial and Professional Regulation's Division of Banking, using the Nationwide Multistate Licensing System. The material development this cycle is a carve-out from that baseline. Effective 2 September 2026, 38 Ill. Adm. Code 207 was amended to exempt money-transmission transactions conducted solely to purchase, sell, or exchange digital assets by a registrant under the Digital Assets and Consumer Protection Act from the general MTMA licensing regime. This means a digital-asset business that registers under DACPA once that requirement commences will not additionally need a general money-transmitter licence for its digital-asset-only transmission activity, avoiding a period of dual regulation as the new DACPA perimeter comes online. This is a licensing-scope decision, not a loosening of the compliance standard a registrant must meet; it simply assigns that compliance obligation to the DACPA registration track rather than the general MTMA track. #### Outlook The practical effect of this carve-out depends on the DACPA registration requirement itself, which does not commence until 1 July 2027. Until then, a digital-asset business that is not yet DACPA-registered continues to fall under the general MTMA licensing analysis for any money-transmission activity it conducts, and the exemption has no present effect for such a business. Market participants should track the 20 October 2026 JCAR hearing on the related DACPA/DAKA implementing rules, as its outcome will shape the registration pathway that ultimately activates this exemption. Periodic update · new data 2026-09-28 #### Licensing, Authorisation & Market Access Illinois' money-transmission licensing regime was overhauled this cycle. The Uniform Money Transmission Modernization Act (205 ILCS 658) took effect 1 January 2026, replacing the prior Transmitters of Money Act (205 ILCS 657). The new statute tightens surety-bond, net-worth, and permissible-investment requirements for licensees and mandates electronic surety bonds filed through the Nationwide Multistate Licensing System, aligning Illinois with the broader multistate money-transmission modernization movement that a number of US states have pursued in recent years. For non-bank payment institutions and e-money-style operators (nonbank_pi_emi in this monitor's classification), this is a compliance-uplift event: existing Illinois money-transmitter licensees needed to meet the new bond and net-worth thresholds as of the January 2026 effective date, and new entrants face the modernized standard from the outset. The most structurally significant feature of the MTMA for digital-asset-focused payment companies is the explicit exclusion of digital assets from the statute's definition of money. This means a business that transacts exclusively in digital assets is not brought within the general money-transmitter licensing perimeter by the MTMA itself. Instead, digital-asset businesses serving Illinois residents fall to the state's separate Digital Assets and Consumer Protection Act framework administered by the Illinois Department of Financial and Professional Regulation. The practical effect is a bifurcated market-access map: a payment company handling both fiat money transmission and digital-asset activity in Illinois must satisfy two distinct licensing regimes rather than one unified one, and the boundary between them turns on whether the specific activity being conducted falls within the MTMA's 'money' definition or outside it into DACPA's digital-asset perimeter. #### Outlook Watch for guidance clarifying edge cases at the MTMA/DACPA boundary, for example hybrid products that combine fiat and digital-asset functionality, where the licensing pathway may not be immediately obvious to a market entrant. No such guidance has been confirmed this cycle. Periodic update · new data 2026-09-22 #### Licensing, Authorisation & Market Access Illinois' IDFPR has proposed rulemaking confirming that digital-asset business activity subject to the DACPA/DAKA framework is exempt from the state's general money-transmitter rules, creating a dedicated licensing track for this activity class rather than folding it into the existing non-bank payment-institution regime. This is a material market-access development: it determines which regulatory pathway a digital-asset business operating in Illinois must follow, and it separates that pathway from the licensing track that governs traditional non-bank payment institutions and money-transmitter licensees in the state. The dedicated track is not yet fully operative. Full DACPA licensing requirements take effect July 1, 2027, with an intermediate milestone of January 1, 2027 for customer disclosure and custody protections. The Digital Asset Kiosk Act (205 ILCS 732) is administered by IDFPR as a companion instrument specifically governing the kiosk/ATM channel of digital-asset access, distinct from but coordinated with the broader DACPA exchange/custody framework. Firms should therefore understand Illinois' digital-asset market-access landscape as bifurcated: a general carve-out from money-transmitter rules on one hand, and a phased-in dedicated licensing regime on the other, with the two currently existing in a transitional gap. #### Outlook The two fixed 2027 milestone dates are the primary structural markers for tracking this market-access transition: January 1, 2027 for disclosure/custody obligations, and July 1, 2027 for full licensing. Firms currently operating under the transitional money-transmitter exemption should monitor IDFPR for further rulemaking detail as these dates approach. Periodic update · new data 2026-09-14 #### Licensing, Authorisation & Market Access Illinois has enacted a wholesale replacement of its money-transmission licensing statute. The Uniform Money Transmission Modernization Act (205 ILCS 658), enacted as P.A. 103-991, repeals and replaces the Transmitters of Money Act (205 ILCS 657), effective 1 January 2026. The Illinois General Assembly's own text describes the Act as designed to replace existing state money-transmission law codified under the prior statute. This is a Tier-1, primary-legislative, confirmed development affecting all nonbank payment institution and e-money issuer licensees in the state. The most consequential change for market access is the raising of net-worth thresholds, surety-bond requirements, and penalty structures for licence applicants. This significantly increases the compliance-cost floor for firms seeking to enter or remain in the Illinois money-transmission market, a licensing barrier that applies specifically to the nonbank payment-institution and e-money-issuer population rather than to bank-chartered entities, which operate under a separate prudential framework outside the money-transmitter licence regime entirely. The bank-versus-nonbank distinction is therefore sharpened by this cycle's development: nonbank PI/EMI licensees face a materially higher bar to entry and continued operation, while bank-affiliated payment activity is unaffected by this specific statutory change. Against that general tightening, the Act simultaneously creates a targeted safe-harbor provision for providers of payroll processing services that had previously operated without a licence. This is a market-access easing measure for one specific sub-sector, running in the opposite direction from the general threshold increase, and reflects the Act's broader purpose of harmonizing Illinois' regime with the multistate uniform money-transmission model that other US states have adopted. The presence of both a tightening and an easing measure in the same statute is itself notable: this is not a uniformly restrictive reform but a recalibration that raises the general bar while carving out a specific, previously grey-area activity into a defined compliant status. The Illinois Department of Financial and Professional Regulation remains the administering authority for licensing under the new Act, continuing its role from the prior statutory regime. No change to the identity or structure of the licensing authority itself was identified this cycle. #### Outlook The key open question for market access going forward is how IDFPR implements the new net-worth and bonding thresholds in practice for licence renewals and new applications, and whether additional payments sub-sectors beyond payroll processing seek to negotiate analogous safe-harbor carve-outs under the modernized, multistate-harmonized framework. No further licensing or market-access development for Illinois nonbank payment institutions was identified this cycle beyond the statutory reset itself. Evidence 6 Sources and findings (6) - T2[https://legalclarity.org/illinois-money-transmitter-license-process-compliance-guide/](https://legalclarity.org/illinois-money-transmitter-license-process-compliance-guide/)retrieved 2026-07-04 - T1[https://idfpr.illinois.gov/dfi/ced/ced-main.html](https://idfpr.illinois.gov/dfi/ced/ced-main.html)retrieved 2026-07-04 - T2[https://legalclarity.org/illinois-money-transmitter-license-process-compliance-guide/](https://legalclarity.org/illinois-money-transmitter-license-process-compliance-guide/)retrieved 2026-07-04 - T1[https://idfpr.illinois.gov/thehub.html](https://idfpr.illinois.gov/thehub.html)retrieved 2026-07-04 - T3[https://www.consumerfinancialserviceslawmonitor.com/2025/08/illinois-passes-new-laws-designed-to-safeguard-consumers-against-cryptocurrency-fraud/](https://www.consumerfinancialserviceslawmonitor.com/2025/08/illinois-passes-new-laws-designed-to-safeguard-consumers-against-cryptocurrency-fraud/)retrieved 2026-07-04 - T2[https://legalclarity.org/illinois-money-transmitter-license-process-compliance-guide/](https://legalclarity.org/illinois-money-transmitter-license-process-compliance-guide/)retrieved 2026-07-04 ### W1bConduct, Safeguarding & PromotionsConfirmedconfirmed 2026-07-04▾# IDFPR's conduct and safeguarding framework combines a Dodd-Frank-styled Consumer Financial Protection Law giving IDFPR UDAAP-style enforcement powers over unlicensed and licensed financial-services providers, with DACPA-specific customer-asset-safeguard, disclosure, and kiosk-fee-cap rules for digital asset businesses layered on top of the traditional currency-exchange/money-transmitter bonding regime. Standing sub-brief · as of 5 July 2026 189 words · last cycle 2026-07-04 #### Conduct, Safeguarding & Financial Promotions Illinois' conduct and safeguarding framework has been substantially reinforced over the past two years. The Illinois Consumer Financial Protection Law, modeled on the federal CFPB-creating statute, grants IDFPR UDAAP-style enforcement authority over licensed and unlicensed financial-services providers, including payments and fintech entities, giving the regulator reach well beyond its traditional licensing perimeter. Layered on top of this general conduct authority, the Digital Asset Kiosk Act caps kiosk transaction fees at 18% and daily transaction amounts at $2,500 for new customers, and requires operators to designate both a compliance officer and a consumer protection officer, extending Illinois' conduct regime into the crypto-kiosk channel specifically. Together these instruments give IDFPR a conduct toolkit that spans both traditional money-transmission/currency-exchange licensees and the newer population of digital-asset kiosk operators, without yet extending a parallel financial-promotions regime to bank-issued products, which continue to be supervised primarily through federal consumer-protection channels. #### Outlook Expect continued IDFPR enforcement activity leveraging the Consumer Financial Protection Law's UDAAP authority against both licensed and unlicensed payments entities, with digital-asset kiosk operators facing the most immediate compliance burden given the Kiosk Act's fee-cap and staffing mandates. Read full sub-brief · 189 words no periodic updates on record for this sub-brief Evidence 5 Sources and findings (5) - T1[https://idfpr.illinois.gov/news/2023/idfpr-announces-landmark-legislation-to-launch-illinois-consumer.html](https://idfpr.illinois.gov/news/2023/idfpr-announces-landmark-legislation-to-launch-illinois-consumer.html)retrieved 2026-07-04 - T3[https://www.consumerfinancialserviceslawmonitor.com/2025/08/illinois-passes-new-laws-designed-to-safeguard-consumers-against-cryptocurrency-fraud/](https://www.consumerfinancialserviceslawmonitor.com/2025/08/illinois-passes-new-laws-designed-to-safeguard-consumers-against-cryptocurrency-fraud/)retrieved 2026-07-04 - T3[https://www.consumerfinancialserviceslawmonitor.com/2025/08/illinois-passes-new-laws-designed-to-safeguard-consumers-against-cryptocurrency-fraud/](https://www.consumerfinancialserviceslawmonitor.com/2025/08/illinois-passes-new-laws-designed-to-safeguard-consumers-against-cryptocurrency-fraud/)retrieved 2026-07-04 - T1[https://idfpr.illinois.gov/about/brochures/dfibrochures/currency-exchange-section.html](https://idfpr.illinois.gov/about/brochures/dfibrochures/currency-exchange-section.html)retrieved 2026-07-04 - T1[https://idfpr.illinois.gov/banking.html](https://idfpr.illinois.gov/banking.html)retrieved 2026-07-04 ### W2Stablecoins & Digital Money1 gaplimited signalConfirmedconfirmed 2026-07-04▾# Illinois's DACPA/DAKA implementing rules (38 Ill. Adm. Code 1031/1032) advanced to Second Notice, with a JCAR hearing scheduled for 2026-10-20. Open gap — wpm-int-2 Draft Digital Asset Tax Act rules on stablecoin treatment rest on a T4 source only this cycle. no under-indexing note recorded Horizon · 2027-01-01 (± a quarter) Illinois Digital Asset Transaction Tax effective date Adopted, not yet in force · Tier 3 source Horizon · 2027-01-01 (± a quarter) Illinois Digital Asset Transaction Tax effective date Adopted, not yet in force · Tier 3 source Horizon · 2026-10-20 (± a quarter) DACPA/DAKA implementing rules JCAR hearing Consultation · Tier 1 source Horizon · 2027-07-01 (± a year) DACPA registration requirement commences Adopted · Tier 1 source Standing sub-brief · as of 5 July 2026 165 words · last cycle 2026-10-18 #### Stablecoins & Digital Money Illinois has moved decisively from proposal to enacted regime on digital assets. Under DACPA, licensed entities cannot store or facilitate trading of stablecoins unless issued by an FDIC-insured institution or a registered issuer maintaining fully-backed reserves at all times, a reserve-integrity restriction that narrows which stablecoins Illinois-licensed platforms may offer residents. Separately, Illinois enacted a 0.2% Digital Asset Transaction Tax, effective January 1, 2027, applying to nearly every trade, transfer, or custody service an exchange performs for an Illinois resident, making it the first state-level crypto transaction tax in the United States. The tax sits atop, rather than in place of, federal GENIUS Act stablecoin oversight, meaning Illinois-based digital-asset activity will face layered federal and state compliance obligations simultaneously. #### Outlook The 0.2% transaction tax takes effect January 1, 2027, and its rollout will be the key test of whether Illinois' first-mover approach to state-level crypto taxation proves durable or triggers a competitive response from neighboring states seeking to attract digital-asset business. Read full sub-brief · 165 words Periodic update · new data 2026-10-18 #### Stablecoins & Digital Money Draft rules for the Illinois Digital Asset Tax Act confirm that stablecoins fall within the category of taxable digital assets under the new 0.2 percent levy, while non-fungible tokens are excluded from that same levy. This is a tax-base classification only; it does not establish a stablecoin issuance, reserve, or redemption framework for Illinois. This finding currently rests on a single lower-tier news source, and the underlying draft rule text itself was not independently retrieved this cycle, so the classification should be treated as provisional pending corroboration from a higher-tier source or the primary draft text. The stablecoin tax classification sits alongside the broader digital-asset rulemaking activity moving through the same Joint Committee on Administrative Rules calendar, with the DACPA and DAKA digital-asset rules scheduled for the same 20 October 2026 hearing as the money-transmission rule amendments. This procedural overlap suggests Illinois regulators are treating money-transmission, digital-asset licensing, and digital-asset taxation as a connected policy agenda rather than three independent workstreams. #### Outlook Corroboration of the stablecoin tax-classification finding against a higher-tier source or the primary draft rule text would materially strengthen confidence in this development. The practical tax treatment of stablecoin transactions with Illinois customers will depend on whether the final filed rules retain the stablecoin inclusion and NFT exclusion as currently drafted. 1 earlier distinct update(s) Periodic update · new data 2026-10-11 #### Stablecoins & Digital Money Illinois's digital-asset regulatory perimeter advanced materially this cycle. The Illinois Department of Financial and Professional Regulation submitted the Second Notice of implementing rules for the Digital Assets and Consumer Protection Act (38 Ill. Adm. Code 1031) and the Digital Asset Kiosks Act (38 Ill. Adm. Code 1032), following First Notice public-comment review, with a Joint Committee on Administrative Rules hearing scheduled for 20 October 2026. This is the Second Notice stage of a rulemaking process that will ultimately govern digital-asset business and kiosk registration requirements in Illinois, with the underlying registration duty under DACPA itself commencing 1 July 2027. The convergence toward in-force status is reinforced by a parallel structural move: the 2 September 2026 amendment to 38 Ill. Adm. Code 207 exempting DACPA-registrant digital-asset money transmission from the general money-transmission licensing regime. Taken together, the Second Notice rulemaking and the money-transmission carve-out indicate Illinois is deliberately sequencing its digital-asset regulatory build-out so that the crypto-specific registration track and the general payments-licensing track do not overlap once both are operative. #### Outlook The 20 October 2026 JCAR hearing is the immediate milestone. Its outcome will determine whether the Second Notice rules proceed toward adoption on the current timeline ahead of the 1 July 2027 registration commencement date, and will settle open questions, including stablecoin-reserve requirements under the related rulemaking, that remain unresolved at Second Notice. Evidence 5 Sources and findings (5) - T3[https://blockworks.co/news/is-illinois-the-next-new-york-inside-the-new-il-crypto-bill](https://blockworks.co/news/is-illinois-the-next-new-york-inside-the-new-il-crypto-bill)retrieved 2026-07-04 - T2[https://www.mayerbrown.com/en/insights/publications/2025/09/illinois-adopts-regulatory-regime-for-digital-assets](https://www.mayerbrown.com/en/insights/publications/2025/09/illinois-adopts-regulatory-regime-for-digital-assets)retrieved 2026-07-04 - T3[https://www.kucoin.com/news/flash/illinois-imposes-0-2-crypto-transaction-tax-despite-federal-framework](https://www.kucoin.com/news/flash/illinois-imposes-0-2-crypto-transaction-tax-despite-federal-framework)retrieved 2026-07-04 - T3[https://www.kucoin.com/news/flash/illinois-imposes-0-2-crypto-transaction-tax-despite-federal-framework](https://www.kucoin.com/news/flash/illinois-imposes-0-2-crypto-transaction-tax-despite-federal-framework)retrieved 2026-07-04 - T2[https://www.morganlewis.com/pubs/2023/04/illinois-proposes-bitlicense-regime-and-other-digital-asset-laws](https://www.morganlewis.com/pubs/2023/04/illinois-proposes-bitlicense-regime-and-other-digital-asset-laws)retrieved 2026-07-04 ### W3Operational Resilience & Critical InfraConfirmedconfirmed 2026-07-04▾# Illinois operational resilience obligations for payments-adjacent entities run through IDFPR's Division of Banking IT-examination authority for state-chartered institutions and, since 2025, through DACPA's explicit cybersecurity/business-continuity mandate for digital asset businesses; a January 2025 multistate cybersecurity enforcement action against a nonbank servicer shows active supervisory teeth on this front even absent a dedicated standalone operational-resilience statute. Kept on Dataprotection.gi, not restated here: data and cloud switching obligations on service providers, including notice periods and charges. [Open its jurisdiction pages on Dataprotection.gi →](https://dataprotection.gi/jurisdictions/) Standing sub-brief · as of 5 July 2026 175 words · last cycle 2026-07-04 #### Operational Resilience & Critical Infrastructure Illinois has not enacted a standalone, cross-sector operational-resilience statute comparable to the EU's DORA, but resilience obligations are building nonetheless through sector-specific and enforcement channels. DACPA mandates cybersecurity measures aligned with recognized frameworks including NIST and ISO 27001, incident logging, review, and reporting, and a mandatory business continuity and disaster recovery plan for digital asset businesses operating in Illinois. Separately, Illinois joined 52 other state financial regulatory agencies in a $20 million multistate penalty against Bayview Companies for deficient cybersecurity practices and insufficient regulator cooperation following a data breach affecting 5.8 million customers in January 2025, demonstrating that supervisory teeth on cybersecurity are active even absent a dedicated statute. Together, the DACPA mandate and the Bayview enforcement action show Illinois building resilience expectations through targeted digital-asset rulemaking and multistate enforcement rather than a single comprehensive framework. #### Outlook No forward-dated cross-sector resilience statute is currently scheduled; expect operational-resilience expectations for Illinois payments and digital-asset firms to keep developing through DACPA-specific rulemaking and continued multistate enforcement cooperation rather than new standalone legislation. Read full sub-brief · 175 words no periodic updates on record for this sub-brief Evidence 4 Sources and findings (4) - T3[https://www.innreg.com/blog/illinois-digital-assets-and-consumer-protection-act](https://www.innreg.com/blog/illinois-digital-assets-and-consumer-protection-act)retrieved 2026-07-04 - T1[https://idfpr.illinois.gov/news/2025/il-joins-states-levying-20-million-penalty-jan-2025.html](https://idfpr.illinois.gov/news/2025/il-joins-states-levying-20-million-penalty-jan-2025.html)retrieved 2026-07-04 - T1[https://idfpr.illinois.gov/news/2025/il-joins-states-levying-20-million-penalty-jan-2025.html](https://idfpr.illinois.gov/news/2025/il-joins-states-levying-20-million-penalty-jan-2025.html)retrieved 2026-07-04 - T1[https://idfpr.illinois.gov/banks/cbt.html](https://idfpr.illinois.gov/banks/cbt.html)retrieved 2026-07-04 ### W4Scheme & Network ComplianceConfirmedconfirmed 2026-07-04▾# Illinois is the site of the first-in-the-world state law restricting card-scheme interchange fee collection on tax and gratuity amounts (the Interchange Fee Prohibition Act), a law that has been substantially litigated, partly upheld by the district court, and then subjected to an OCC federal-preemption order in 2026 covering national banks and federal savings associations ahead of its July 1, 2026 effective date. Standing sub-brief · as of 5 July 2026 195 words · last cycle 2026-07-04 #### Scheme & Network Compliance Illinois is the site of the first-in-the-world state intervention into card-scheme interchange economics, and the module's trajectory this cycle is dominated by a direct state-federal collision. Payment-card issuers, networks, and processors are prohibited from charging or collecting interchange fees on the sales-tax and gratuity portions of card transactions, effective July 1, 2026, under the Illinois Interchange Fee Prohibition Act (815 ILCS 151/150-1). On April 29, 2026, the Office of the Comptroller of the Currency issued an interim final order concluding federal law preempts the Illinois Interchange Fee Prohibition Act as applied to national banks and federal savings associations, covering both the interchange-fee restriction on tax and gratuity amounts and the transaction-data-use restriction. The preemption order arrives roughly two months before IFPA's compliance date, creating a bifurcated compliance landscape in which national banks may be shielded from the state restriction while state-chartered institutions and non-depository card-scheme participants remain subject to it. #### Outlook The July 1, 2026 compliance date is the immediate marker to watch; expect continued litigation and possible further federal or judicial clarification on the scope of the OCC's preemption order before card issuers and networks can finalize their compliance posture. Read full sub-brief · 195 words no periodic updates on record for this sub-brief Evidence 5 Sources and findings (5) - T2[https://www.aba.com/advocacy/policy-analysis/illinois-interchange-fee-prohibition-act-ruling](https://www.aba.com/advocacy/policy-analysis/illinois-interchange-fee-prohibition-act-ruling)retrieved 2026-07-04 - T2[https://winthrop.com/bold-perspectives/judge-upholds-illinois-laws-interchange-fee-restrictions-strikes-down-data-usage-limitation/](https://winthrop.com/bold-perspectives/judge-upholds-illinois-laws-interchange-fee-restrictions-strikes-down-data-usage-limitation/)retrieved 2026-07-04 - T1[https://www.federalregister.gov/documents/2026/04/29/2026-08341/order-preempting-the-illinois-interchange-fee-prohibition-act](https://www.federalregister.gov/documents/2026/04/29/2026-08341/order-preempting-the-illinois-interchange-fee-prohibition-act)retrieved 2026-07-04 - T3[https://capitolnewsillinois.com/news/fate-of-illinois-first-in-the-nation-credit-card-swipe-fee-ban-awaits-judges-ruling/](https://capitolnewsillinois.com/news/fate-of-illinois-first-in-the-nation-credit-card-swipe-fee-ban-awaits-judges-ruling/)retrieved 2026-07-04 - T3[https://laweconcenter.org/resources/regulating-state-interchange-fees-evaluating-the-likely-effects-of-the-ifpa/](https://laweconcenter.org/resources/regulating-state-interchange-fees-evaluating-the-likely-effects-of-the-ifpa/)retrieved 2026-07-04 ### W5Payment Corridor DynamicsProbableconfirmed 2026-07-04▾# Illinois payment-corridor exposure runs through Chicago-headquartered federal settlement infrastructure (the Federal Reserve Bank of Chicago operating Fedwire and supporting FedNow) and through Chicago-based cross-border remittance providers; dedicated state-level corridor regulation beyond the money-transmitter licensing regime for cross-border remitters (W1a) was not separately located and is recorded as absent-field provenance pending periodic-run confirmation. Standing sub-brief · as of 5 July 2026 133 words · last cycle 2026-07-04 #### Payment Corridor Dynamics Illinois' payment-corridor exposure is infrastructure-mediated rather than statute-mediated, running through Federal Reserve rails rather than any dedicated state corridor law. The Federal Reserve Bank of Chicago provides Fedwire and FedNow settlement infrastructure access for Illinois depository institutions, underpinning the state's payment-corridor exposure absent a dedicated state corridor statute. For smaller institutions, FedNow transactions for financial institutions using correspondents settle in the correspondent's Federal Reserve master account, extending instant-payment corridor access to smaller Illinois institutions that lack a direct master account. No Illinois-specific cross-border remittance corridor statute beyond general money-transmitter licensing was identified this cycle. #### Outlook Corridor dynamics for Illinois remain a function of Federal Reserve infrastructure decisions rather than state legislative action; a targeted look at Illinois-licensed remittance corridor practices is flagged as a research gap for a future cycle. Read full sub-brief · 133 words no periodic updates on record for this sub-brief Evidence 4 Sources and findings (4) - T1[https://www.chicagofed.org/](https://www.chicagofed.org/)retrieved 2026-07-04 - T1[https://www.frbservices.org/financial-services/wires](https://www.frbservices.org/financial-services/wires)retrieved 2026-07-04 - T3[https://www.builtinchicago.org/companies/type/payments-companies/reputation/stability-growth](https://www.builtinchicago.org/companies/type/payments-companies/reputation/stability-growth)retrieved 2026-07-04 - T2[https://www.aciworldwide.com/fednow](https://www.aciworldwide.com/fednow)retrieved 2026-07-04 ### W6Industry Structure & CommercialProbableconfirmed 2026-07-04▾# Illinois' payments/fintech industry structure is anchored by Chicago as a major national fintech hub (723 active fintech companies, $12B cumulative funding, several unicorns) alongside legacy card-network incumbent Discover Financial Services (now merged into Capital One) headquartered in Riverwoods, giving the state both a deep trading/financial-infrastructure talent base and a large card-issuer/network commercial footprint. Standing sub-brief · as of 5 July 2026 149 words · last cycle 2026-07-04 #### Industry Structure & Commercial Dynamics Illinois' payments and fintech industry structure combines a deep, diversified startup base with a significant recent consolidation among its largest incumbents. As of January 2026, Chicago hosts 723 active fintech companies with $12 billion in cumulative funding and 7 fintech unicorns, anchored by CME Group, Northern Trust, and the city's trading-firm ecosystem. Against that backdrop of ecosystem depth, Discover Financial Services, headquartered in Riverwoods, IL with 21,000 employees pre-merger, was merged into Capital One Financial Corporation in 2025, ending Illinois' largest independent card-network and issuer commercial presence. The consolidation removes a marquee Illinois-headquartered brand from the state's commercial roster even as the broader startup and venture-funded fintech base remains intact. #### Outlook Expect continued monitoring of whether Chicago's deep fintech funding base can produce a new anchor-scale commercial presence to replace Discover's historic headquarters role, and of any further restructuring following the Capital One integration. Read full sub-brief · 149 words no periodic updates on record for this sub-brief Evidence 4 Sources and findings (4) - T3[https://tracxn.com/d/explore/fintech-startups-in-chicago-united-states/__JXH0sKQFjjYV9TfzUVuhLHpNLp9GEDoadVpyeVVKJo0](https://tracxn.com/d/explore/fintech-startups-in-chicago-united-states/__JXH0sKQFjjYV9TfzUVuhLHpNLp9GEDoadVpyeVVKJo0)retrieved 2026-07-04 - T3[https://tracxn.com/d/explore/fintech-startups-in-chicago-united-states/__JXH0sKQFjjYV9TfzUVuhLHpNLp9GEDoadVpyeVVKJo0](https://tracxn.com/d/explore/fintech-startups-in-chicago-united-states/__JXH0sKQFjjYV9TfzUVuhLHpNLp9GEDoadVpyeVVKJo0)retrieved 2026-07-04 - T3[https://www.ellty.com/blog/chicago-fintech-investors](https://www.ellty.com/blog/chicago-fintech-investors)retrieved 2026-07-04 - T3[https://pitchbook.com/profiles/company/13316-95](https://pitchbook.com/profiles/company/13316-95)retrieved 2026-07-04 ### W7Legal & Litigation1 judgmentConfirmedconfirmed 2026-07-04▾# Illinois Bankers Association v. Raoul (challenging the IFPA) remains the state's central payments-litigation thread. Following the Feb. 10, 2026 mixed summary-judgment ruling, the OCC's April 2026 interim final actions, and the June 1, 2026 opinion permanently enjoining the IFPA's Interchange Fee Limitation for national banks, federal savings associations, out-of-state state banks and payment-card networks (while leaving Illinois-chartered state banks and credit unions subject to it, and the IFPA's Data Usage Limitation permanently enjoined for covered federal entities), new consolidated cross-appeals were filed Oct. 13-14, 2026 and formally CONSOLIDATED for briefing/disposition by 7th Circuit order on Oct. 16, 2026 (Nos. 26-3082 and 26-3106), with the Attorney General's opening brief due Nov. 23, 2026 and oral argument expected before end of February 2027. Key judgment — Probable · impact ELEVATED Illinois' interchange-fee regulatory landscape remains fragmented between state-chartered and federally regulated institutions pending the 7th Circuit's resolution of consolidated cross-appeals, with no near-term legislative or administrative resolution in sight. claims: wpm-2026-W43-001, wpm-2026-W43-002 Horizon · 2027-Q1 (± a quarter) 7th Circuit oral argument expected in Illinois Bankers Association v. Raoul In force · Tier 1 source Standing sub-brief · as of 19 August 2026 341 words · last cycle 2026-10-25 #### Legal & Litigation The Illinois Interchange Fee Prohibition Act (IFPA) moved through four procedural stages this cycle, each narrowing the law's reach for federally-regulated entities. On February 10, 2026, the Northern District of Illinois, in a ruling by Chief Judge Kendall, upheld the IFPA's core interchange-fee limitation but permanently enjoined the data-usage limitation for national banks, federal savings associations, federal credit unions, and certain payment networks. On April 24, 2026, the Office of the Comptroller of the Currency issued an Interim Final Rule and Interim Final Order concluding that federal law preempts the IFPA in its entirety for national banks and federal savings associations, effective June 30, 2026; this Tier-1 primary regulatory action carries this monitor's highest confidence and impact ratings. The Seventh Circuit responded on May 8, 2026 by vacating the district court's February judgment and remanding the case in light of the OCC's action. On remand, the district court permanently enjoined the IFPA's core interchange-fee limitation on June 1, 2026 for national banks, federal savings associations, federal credit unions, out-of-state state banks, and payment card networks acting on their behalf. The Illinois General Assembly, acting the same day, passed SB 3645, delaying the IFPA's general effective date by one year, from July 1, 2026 to July 1, 2027, for all financial institutions. The combined effect of the OCC order and the injunction on remand is to substantially neutralize the IFPA for the federally-regulated entities that process the overwhelming majority of U.S. card volume, while non-federally-regulated entities remain nominally subject to the statute under its newly delayed effective date. #### Outlook The operative date going forward is July 1, 2027, the IFPA's general effective date as delayed by SB 3645, when the core interchange-fee and data-usage limitations become generally applicable to any entity not covered by the OCC's preemption order or the injunction issued on remand. The open question is whether non-federally-regulated entities mount their own challenge before that date, or whether the current bifurcated regime — preempted for federally-regulated entities, pending for everyone else — persists into 2027 largely unchallenged. Read full sub-brief · 341 words Periodic update · new data 2026-10-25 #### Legal & Litigation Illinois Bankers Association v. Raoul, the central piece of litigation testing the enforceability of the Illinois Interchange Fee Prohibition Act, advanced procedurally on October 16, 2026 when the Seventh Circuit Court of Appeals ordered two new cross-appeals, docketed as Nos. 26-3082 and 26-3106, consolidated for purposes of briefing and disposition. This consolidation means the appellate court will resolve the state's and the challengers' positions together rather than through separate parallel proceedings. The Attorney General's opening brief is due November 23, 2026, and oral argument is expected before the end of February 2027. The appeals arise from a June 1, 2026 district-court ruling that permanently enjoined the Act's interchange-fee limitation as applied to national banks, federal savings associations, out-of-state state banks, and payment card networks. That ruling followed the Office of the Comptroller of the Currency's April 2026 interim final rule or order addressing the same interchange-fee question at the federal level, which provided the backdrop against which the district court acted. The injunction did not reach Illinois-chartered state banks or credit unions, which remain subject to the fee limitation as a matter of current law. Separately, the Act's data-usage limitation was permanently enjoined as applied to the same set of covered federally regulated entities. The net effect of this sequence is a fragmented compliance landscape: an institution's obligations under the interchange-fee limitation currently depend on its charter type, with nationally chartered banks, federal savings associations, out-of-state state banks, and payment card networks operating free of the limitation while Illinois-chartered state banks and credit unions remain bound by it. This fragmentation is the direct subject of the consolidated appeals now before the Seventh Circuit, and no legislative or administrative step toward resolving the split was identified this period. #### Outlook The near-term procedural sequence is fixed: the Attorney General's opening brief is due November 23, 2026, to be followed by response briefing from the plaintiff banking associations and payment networks, with oral argument expected before the end of February 2027. Until the Seventh Circuit rules, the current charter-dependent split in interchange-fee compliance obligations will persist, meaning institutions operating across charter types in Illinois continue to face differing fee-limitation exposure depending on how they are chartered and who processes their transactions. Evidence 5 Sources and findings (5) - T3[https://www.hunton.com/privacy-and-cybersecurity-law-blog/illinois-damages-limitation-for-biometric-privacy-violations-applies-retroactively](https://www.hunton.com/privacy-and-cybersecurity-law-blog/illinois-damages-limitation-for-biometric-privacy-violations-applies-retroactively)retrieved 2026-07-04 - T2[https://www.dorsey.com/newsresources/publications/client-alerts/2026/6/bipa-financial-institution-exemption](https://www.dorsey.com/newsresources/publications/client-alerts/2026/6/bipa-financial-institution-exemption)retrieved 2026-07-04 - T2[https://www.americanbar.org/groups/business_law/resources/business-law-today/2026-may/7th-circuit-holds-bipa-damages-remedy-applies-retroactively/](https://www.americanbar.org/groups/business_law/resources/business-law-today/2026-may/7th-circuit-holds-bipa-damages-remedy-applies-retroactively/)retrieved 2026-07-04 - T3[https://laweconcenter.org/resources/regulating-state-interchange-fees-evaluating-the-likely-effects-of-the-ifpa/](https://laweconcenter.org/resources/regulating-state-interchange-fees-evaluating-the-likely-effects-of-the-ifpa/)retrieved 2026-07-04 - T3[https://www.commerciallitigationupdate.com/biometric-backlash-the-rising-wave-of-litigation-under-bipa-and-beyond](https://www.commerciallitigationupdate.com/biometric-backlash-the-rising-wave-of-litigation-under-bipa-and-beyond)retrieved 2026-07-04 ### W8Merchant Acquiring & RiskConfirmedconfirmed 2026-07-04▾# Illinois merchant-acquiring dynamics were reshaped by the May 2025 completion of Capital One's acquisition of Riverwoods-based Discover Financial Services (merging Discover Bank into Capital One, National Association), which consolidates a major card-network/acquirer relationship into a non-Illinois-headquartered entity, while the pending Interchange Fee Prohibition Act imposes new documentation and refund-processing burdens directly on acquirers and issuers operating in the state. Standing sub-brief · as of 5 July 2026 169 words · last cycle 2026-07-04 #### Merchant Acquiring & Risk Illinois merchant-acquiring dynamics have been reshaped both by consolidation among issuers and by new compliance burdens tied to the interchange dispute. Capital One closed its $35 billion acquisition of Discover Financial Services on May 18, 2025, merging Discover Bank into Capital One, National Association, consolidating a major Illinois-headquartered acquirer and issuer relationship. Separately, ahead of the July 1, 2026 IFPA compliance date, card issuers and networks must implement procedures to receive and review merchant tax and gratuity documentation and pay merchant refunds within 30 days, subject to a $1,000-per-transaction civil penalty for missing the window. Together, these two developments load new operational and financial obligations onto Illinois-facing acquirers and issuers at the same time as the sector consolidates around fewer, larger players. #### Outlook Acquirers and issuers operating in Illinois face a compressed window to build the tax/gratuity documentation and 30-day refund workflow mandated by IFPA ahead of July 1, 2026, even as the OCC's preemption order introduces uncertainty over which institutions the obligation ultimately binds. Read full sub-brief · 169 words no periodic updates on record for this sub-brief Evidence 4 Sources and findings (4) - T2[https://www.arnoldporter.com/en/perspectives/advisories/2025/06/bank-regulators-approval-of-capital-one-and-discover-deal](https://www.arnoldporter.com/en/perspectives/advisories/2025/06/bank-regulators-approval-of-capital-one-and-discover-deal)retrieved 2026-07-04 - T2[https://www.aba.com/advocacy/policy-analysis/illinois-interchange-fee-prohibition-act-ruling](https://www.aba.com/advocacy/policy-analysis/illinois-interchange-fee-prohibition-act-ruling)retrieved 2026-07-04 - T2[https://winthrop.com/bold-perspectives/judge-upholds-illinois-laws-interchange-fee-restrictions-strikes-down-data-usage-limitation/](https://winthrop.com/bold-perspectives/judge-upholds-illinois-laws-interchange-fee-restrictions-strikes-down-data-usage-limitation/)retrieved 2026-07-04 - T3[https://www.gmtoday.com/business/capital-one-layoffs-hitting-former-discover-headquarters-in-illinois/article_440a1315-a34e-4b80-b94e-353806f9e3a8.html](https://www.gmtoday.com/business/capital-one-layoffs-hitting-former-discover-headquarters-in-illinois/article_440a1315-a34e-4b80-b94e-353806f9e3a8.html)retrieved 2026-07-04 ### W9Product Innovation & Market DevelopmentProbableconfirmed 2026-07-04▾# Illinois enacted a first-in-the-nation Digital Asset Tax Act (part of the FY2027 Revenue Omnibus, SB3019/P.A. 104-0468), imposing a 0.2% privilege tax on the value of digital-asset business activity collected by digital-asset brokers on behalf of Illinois customers, effective 2027-01-01. A repeal bill (HB5798) was introduced within days of enactment. Horizon · 2027-01-01 (± a quarter) Illinois Digital Asset Tax Act takes effect Adopted · Tier 3 source Standing sub-brief · as of 4 August 2026 370 words · last cycle 2026-09-28 #### Product Innovation & Market Development The Illinois Department of Financial and Professional Regulation has proposed implementing rules under Part 1031 of Title 38 of the Illinois Administrative Code for the Digital Assets and Consumer Protection Act (205 ILCS 731); the Illinois Blockchain Association submitted a formal comment letter in June 2026 addressing the statutory definition of "control," startup fee relief, alignment of stablecoin-reserve requirements with the federal GENIUS Act, and application grandfathering. Separately, Illinois enacted the Digital Asset Tax Act under SB 3019, imposing a 0.2% privilege tax on digital-asset business activity, including exchange, transfer, custody, and storage, connected to Illinois customers, effective January 1, 2027. It is the first transaction-based state-level cryptocurrency tax in the United States; brokers must register with the Department of Revenue by that date, and noncompliance is a Class 3 felony. The Digital Chamber filed suit against Illinois on July 21, 2026, alleging that the tax violates the state constitution's uniformity and due-process guarantees, the US Commerce Clause, and the Internet Tax Freedom Act. The unresolved constitutional challenge is assessed as creating a binary compliance-planning risk for crypto-linked payment and gambling-adjacent funding rails ahead of the January 2027 effective date. The Product Innovation & Market Development domain tracker codes Illinois' digital-asset trajectory as escalating, and the standing Stablecoin Frameworks tracker likewise assesses an escalating trajectory, driven jointly by the DACPA rulemaking's pursuit of GENIUS Act-aligned reserve requirements and the newly litigated transaction tax. #### Outlook Finalisation of the DACPA Part 1031 implementing rules is expected in the third quarter of 2026, carrying a half-year uncertainty band, and will settle the stablecoin-reserve alignment and virtual-currency-kiosk licensing detail contested in the Illinois Blockchain Association's comment letter. The Digital Asset Tax Act's January 1, 2027 effective date, carrying a quarter-level uncertainty band, remains contingent on the outcome of The Digital Chamber's litigation, with a competing state-legislative repeal effort, HB5798, introduced June 22, 2026 also worth tracking. Sources are assessed as unlikely to stabilise before January 1, 2027, once the tax's litigation and effective date are resolved. The interpreter's lead-signal tracking list flags continued monitoring of The Digital Chamber v. Illinois litigation outcome ahead of the January 1, 2027 effective date, and of HB5798 repeal-bill progress in the state legislature. Read full sub-brief · 370 words Periodic update · new data 2026-09-28 #### Product Innovation & Market Development Illinois enacted a first-in-the-nation Digital Asset Tax Act as Article 3 of the FY2027 Revenue Omnibus (SB3019, P.A. 104-0468), imposing a 0.2% privilege tax on the value of digital-asset business activity, exchange, transfer, or storage, collected by digital-asset brokers on behalf of Illinois customers, effective 1 January 2027. This is a novel instrument with no direct precedent among US state tax regimes, and it inserts a new transaction-level cost into every digital-asset business model operating in Illinois that routes activity through a broker relationship. A repeal bill, HB5798, was introduced within days of the tax's enactment and would repeal the Digital Asset Tax Act in its entirety, effective immediately, if it passes; its status is unresolved as of this cycle, and the scope question of whether the levy applies to decentralized or peer-to-peer activity without a centralized Illinois-based broker remains disputed. The combination of a genuinely novel tax instrument and an immediate legislative repeal effort is itself the product-development signal here: digital-asset product teams building for Illinois customers face policy volatility on the cost side that is unusual even by the standards of a fast-moving regulatory environment, and should not build pricing models around the 1 January 2027 effective date as a fixed assumption. #### Outlook The resolution of HB5798 is the single variable that will determine whether Illinois' digital-asset transaction-tax experiment proceeds as enacted, is repealed before taking effect, or is narrowed in scope. Product teams should treat the 1 January 2027 effective date as provisional pending that outcome. Evidence 4 Sources and findings (4) - T3[https://natlawreview.com/article/state-level-digital-asset-licensing-what-watch-we-head-2026](https://natlawreview.com/article/state-level-digital-asset-licensing-what-watch-we-head-2026)retrieved 2026-07-04 - T2[https://www.mayerbrown.com/en/insights/publications/2025/09/illinois-adopts-regulatory-regime-for-digital-assets](https://www.mayerbrown.com/en/insights/publications/2025/09/illinois-adopts-regulatory-regime-for-digital-assets)retrieved 2026-07-04 - T1[https://www.frbservices.org/financial-services/fednow/about.html](https://www.frbservices.org/financial-services/fednow/about.html)retrieved 2026-07-04 - T3[https://blockworks.co/news/is-illinois-the-next-new-york-inside-the-new-il-crypto-bill](https://blockworks.co/news/is-illinois-the-next-new-york-inside-the-new-il-crypto-bill)retrieved 2026-07-04 ### W10Consumer Protection & APP FraudConfirmedconfirmed 2026-07-04▾# Illinois consumer protection in payments/credit rests on the Predatory Loan Prevention Act's 36% APR cap (in force since March 2021) plus new DACPA/Digital Asset Kiosk Act consumer safeguards enacted in 2025 targeting crypto-fraud losses, which the Governor's office linked to $272 million in FBI-reported Illinois crypto fraud losses in 2024; dedicated APP (authorised-push-payment) reimbursement rules specific to bank transfers were not located and are recorded as absent-field provenance. Standing sub-brief · as of 5 July 2026 166 words · last cycle 2026-09-28 #### Consumer Protection & APP Fraud Illinois consumer protection in payments spans both longstanding credit-cost limits and newer crypto-specific fraud safeguards. The Predatory Loan Prevention Act, in force since March 2021, caps APR at 36% on most consumer loans in Illinois; a Woodstock Institute study found Illinois consumers saved over $600 million in interest and fees on payday, installment, and title loans between 2019 and 2022. On the digital-asset side, the Digital Asset Kiosk Act requires operators to implement anti-fraud policies and blockchain analytics to detect fraud, and to issue full refunds for fraudulent transactions contingent on timely reporting and submission of a police report, responding to $272 million in FBI-reported 2024 Illinois crypto-fraud losses. No Illinois-specific mandatory APP reimbursement scheme for bank-transfer fraud distinct from federal Reg E/EFTA protections was identified this cycle. #### Outlook The kiosk-fraud refund mechanism is a narrow, crypto-specific analogue to broader APP-fraud reimbursement debates seen elsewhere; expect continued monitoring of whether Illinois extends a comparable mandatory-refund obligation to bank-transfer fraud more generally. Read full sub-brief · 166 words Periodic update · new data 2026-09-28 #### Consumer Protection & APP Fraud Illinois' Digital Asset Kiosk Act (205 ILCS 732) caps daily transactions at digital-asset kiosks at $2,500 for new customers and $10,500 for existing customers, and provides full refunds to victims of kiosk-related fraud. The measure, in force since 18 August 2025, is a direct regulatory response to a documented $272 million in 2024 Illinois crypto-scam losses, targeting a specific and well-evidenced fraud vector, physical cryptocurrency kiosks used to move victim funds quickly into digital assets, with a transaction-cap mechanism designed to slow the pace at which a fraud victim can be induced to transfer large sums before the transaction is flagged or refused. The caps distinguish between new and existing customers, applying a materially lower threshold to new customers, which is consistent with the observed fraud pattern in which victims are often first-time or infrequent kiosk users being coached in real time by a scammer. The full-refund provision for kiosk-fraud victims is a distinct consumer-protection backstop that goes beyond the transaction-cap mechanism itself, shifting a portion of the loss risk from consumer to kiosk operator in confirmed fraud cases. #### Outlook Watch for reporting on the practical effectiveness of the transaction caps and refund mechanism in reducing Illinois kiosk-fraud losses in the period following the August 2025 effective date, and for whether IDFPR extends comparable caps or refund obligations to other digital-asset consumer channels beyond kiosks. Evidence 5 Sources and findings (5) - T1[https://illinoisattorneygeneral.gov/consumer-protection/finance-and-credit/](https://illinoisattorneygeneral.gov/consumer-protection/finance-and-credit/)retrieved 2026-07-04 - T3[https://www.consumerfinancialserviceslawmonitor.com/2025/08/illinois-passes-new-laws-designed-to-safeguard-consumers-against-cryptocurrency-fraud/](https://www.consumerfinancialserviceslawmonitor.com/2025/08/illinois-passes-new-laws-designed-to-safeguard-consumers-against-cryptocurrency-fraud/)retrieved 2026-07-04 - T3[https://www.consumerfinancialserviceslawmonitor.com/2025/08/illinois-passes-new-laws-designed-to-safeguard-consumers-against-cryptocurrency-fraud/](https://www.consumerfinancialserviceslawmonitor.com/2025/08/illinois-passes-new-laws-designed-to-safeguard-consumers-against-cryptocurrency-fraud/)retrieved 2026-07-04 - T3[https://woodstockinst.org/predatory-lending/plpa-is-working/](https://woodstockinst.org/predatory-lending/plpa-is-working/)retrieved 2026-07-04 - T1[https://idfpr.illinois.gov/admin/banks/complaintinfo.html](https://idfpr.illinois.gov/admin/banks/complaintinfo.html)retrieved 2026-07-04 ### W11AML/CFT & Financial CrimeSourced from Sentinel.gi ↗Confirmedconfirmed 2026-07-04▾# Sentinel.gi payments-context position: Illinois participates as an active member of the 47-48-state multistate BSA/AML supervisory bloc for money transmitters and mobile-payment services, most visibly demonstrated by the January 2025 $80 million multistate enforcement action against Block, Inc.'s Cash App, and state regulators collectively remain the primary licensing supervisor for the more than 700 money transmitters operating under the Money Transmission Modernization Act model. Standing sub-brief · as of 5 July 2026 168 words · last cycle 2026-07-04 #### AML/CFT & Financial Crime This module's Illinois intelligence is sourced from the Sentinel.gi feed and is carried here as payments-conduct and supervisory-context only; the underlying illicit-finance analysis is referred to FIM. Illinois and 47 other state financial regulatory agencies took coordinated action against Block, Inc., resulting in an $80 million multistate penalty, an independent BSA/AML program review, and a 9-month reporting/12-month remediation timeline for the Cash App mobile payment service used by more than 50 million US consumers. Separately, state financial regulators, including IDFPR, license and serve as primary supervisor for more than 700 money transmitters, with 99% of transmission activity governed by the state-developed Money Transmission Modernization Act model. Illinois' participation in this multistate supervisory bloc signals continued attention to nonbank mobile-payment services' BSA/AML compliance. #### Outlook Expect continued multistate supervisory attention to nonbank mobile-payment services' BSA/AML compliance, with Illinois maintaining its role in the coordinated state regulatory bloc rather than pursuing independent enforcement action; deeper illicit-finance analysis of the Cash App matter is tracked separately via FIM. Read full sub-brief · 168 words no periodic updates on record for this sub-brief Evidence 6 Sources and findings (6) - T3sentinel.https://www.pymnts.com/news/regulation/2025/block-to-pay-80-million-to-settle-aml-violation-allegations/ - T?FIM (sentinel.gi) per-JID baseline profile — United States — Illinois — Illinois AML/CTF oversight sits atop the federal BSA/OFAC framework: the Illinois Department of Financial and Professional Regulation (IDFPR) licenses currency exchanges and money transmitters under the Transmitters of Money Act and Currency Exchange Act, and shares OFAC-compliance findings with Treasury under a standing MOU. Chicago hosts a globally significant derivatives complex (CME Group) under CFTC jurisdiction and the nation's highest concentration of crypto ATM kiosks, both federally supervised with limited state-specific AML overlay; no Illinois-specific virtual-currency licensing regime is yet enacted. - T?FIM (sentinel.gi) gaps_register_cumulative (issue FIM-BASE-GAP-002) — Gap: regulatory-failure - T2FIM (sentinel.gi) enforcement_action_register (issue FIM-BASE-ENF-004) — Enforcement: Commodity Futures Trading Commission (CFTC) — State of Illinois officials, including Governor JB Pritzker, Illinois Attorney General, and Illinois Gaming Board - T?FIM (sentinel.gi) gaps_register_cumulative (issue FIM-BASE-GAP-001) — Gap: enforcement-absence - T?FIM (sentinel.gi) gaps_register_cumulative (issue FIM-BASE-GAP-003) — Gap: legal-gap ### W12Correspondent Banking, Settlement & AccessProbableconfirmed 2026-07-04▾# Illinois settlement access runs through the Federal Reserve Bank of Chicago's operation of Fedwire (large-value RTGS) and the FedNow instant-payments service, which explicitly supports correspondent/respondent settlement arrangements for smaller institutions lacking direct Fed master accounts; IDFPR's Division of Banking charters the state banks that hold or access these Fed accounts. Standing sub-brief · as of 5 July 2026 171 words · last cycle 2026-07-04 #### Correspondent Banking, Settlement & Access Illinois' correspondent-banking and settlement access runs through core Federal Reserve infrastructure, with the bank-versus-nonbank access asymmetry forming this module's analytical spine: bank-chartered institutions access Fedwire and NSS directly or through correspondent arrangements, while nonbank payment institutions must rely on sponsoring banks for settlement access. Fedwire Funds Service participants benefit from settlement finality on payments credited to Federal Reserve Bank master accounts, the core large-value RTGS rail underlying Illinois bank settlement access. On October 9, 2025, the Federal Reserve Board announced expanded operating days for Fedwire and the National Settlement Service to include Sundays and weekday holidays, with NSS serving as a Fedwire contingency backup to support settlement resiliency for Illinois institutions. These operational-resiliency enhancements to the core settlement rail benefit directly-connected bank participants first, with nonbank access continuing to depend on correspondent sponsorship arrangements. #### Outlook Expect continued Federal Reserve operational enhancements to Fedwire and NSS resiliency, with the bank-nonbank correspondent access asymmetry remaining the structural constraint for nonbank payment institutions seeking direct settlement access in Illinois. Read full sub-brief · 171 words no periodic updates on record for this sub-brief Evidence 4 Sources and findings (4) - T1[https://www.frbservices.org/financial-services/wires](https://www.frbservices.org/financial-services/wires)retrieved 2026-07-04 - T2[https://www.aciworldwide.com/fednow](https://www.aciworldwide.com/fednow)retrieved 2026-07-04 - T2[https://www.forvismazars.us/forsights/2025/12/federal-reserve-banks-payment-system-updates-fedwire-nss](https://www.forvismazars.us/forsights/2025/12/federal-reserve-banks-payment-system-updates-fedwire-nss)retrieved 2026-07-04 - T1[https://idfpr.illinois.gov/banks/cbt.html](https://idfpr.illinois.gov/banks/cbt.html)retrieved 2026-07-04 ### W13Commercial Intelligence (M&A, Investment & Product)limited signalProbableconfirmed 2026-07-04▾# The dominant trailing-window commercial event remains the integration fallout from Capital One's $35 billion acquisition of Riverwoods-based Discover Financial Services (closed May 2025), including a ~600-employee layoff round at the former Discover campus in late 2025, set against a broader backdrop of resilient Chicago fintech venture funding through 2025-2026. Standing sub-brief · as of 5 July 2026 129 words · last cycle 2026-10-11 #### Commercial Intelligence (M&A, Investment & Product) Capital One's $35 billion acquisition of Riverwoods, IL-headquartered Discover Financial Services closed May 18, 2025, after Federal Reserve Board and OCC approval on April 18, 2025, and dominates the trailing twelve-month commercial-events window for this jurisdiction. The merged Capital One/Discover company laid off nearly 600 employees at the former Discover headquarters in Riverwoods, Illinois during August-September 2025, though roughly 4,000 employees remained associated with the facility, a post-merger integration event distinct from the deal itself. No other discrete M&A, investment, or product-launch events specific to Illinois were identified this cycle. #### Outlook Expect continued monitoring of Riverwoods-campus headcount and facility-use decisions as Capital One completes integration of the former Discover operations, alongside any new product or investment announcements touching Illinois-based payments and fintech operations. Read full sub-brief · 129 words Periodic update · new data 2026-10-11 #### Commercial Intelligence & Fintech Gaming and Leisure Properties, Inc. disclosed, in an SEC filing, continuing tranches of its 940 million dollar capital-commitment development-funding arrangement with Bally's Chicago, with 201.6 million dollars disbursed in the fourth quarter of 2025 and approximately 98 million dollars disbursed in the first quarter of 2026. This is a discrete, disclosed commercial capital-deployment event in Illinois's casino sector, distinct from any payment-service-provider or e-money-institution commercial activity; GLPI is a casino-property investor, not a payments entrant, and the funding supports casino-development infrastructure rather than payments infrastructure. No other discrete commercial event, M&A transaction, investment round, or product launch in Illinois's payments, stablecoin, or fintech space was identified this cycle. #### Outlook Further tranches of the GLPI-Bally's Chicago funding commitment are expected to be disclosed as the casino-development project proceeds; this is a capital-deployment schedule rather than a regulatory development, and does not itself signal any change to Illinois's payments or fintech licensing environment. Evidence 3 Sources and findings (3) - T3[https://www.gmtoday.com/business/capital-one-layoffs-hitting-former-discover-headquarters-in-illinois/article_440a1315-a34e-4b80-b94e-353806f9e3a8.html](https://www.gmtoday.com/business/capital-one-layoffs-hitting-former-discover-headquarters-in-illinois/article_440a1315-a34e-4b80-b94e-353806f9e3a8.html)retrieved 2026-07-04 - T2[https://www.arnoldporter.com/en/perspectives/advisories/2025/06/bank-regulators-approval-of-capital-one-and-discover-deal](https://www.arnoldporter.com/en/perspectives/advisories/2025/06/bank-regulators-approval-of-capital-one-and-discover-deal)retrieved 2026-07-04 - T3[https://tracxn.com/d/explore/fintech-startups-in-chicago-united-states/__JXH0sKQFjjYV9TfzUVuhLHpNLp9GEDoadVpyeVVKJo0](https://tracxn.com/d/explore/fintech-startups-in-chicago-united-states/__JXH0sKQFjjYV9TfzUVuhLHpNLp9GEDoadVpyeVVKJo0)retrieved 2026-07-04 No modules match. Filters combine as OR inside a group and AND across groups. 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