Credit Cards and Merchant Fees 2010 Legislation

Last updated: July 21, 2010

NCSL Staff Contact: Heather Morton, Denver

Every time a consumer makes a purchase using a credit or debit card, the merchant pays a "merchant discount fee," a percentage on the transaction price including all state and local sales taxes. The fee is to cover the banks' processing costs. Included in this fee is the "interchange fee," the fee the merchant’s pays the cardholder’s bank. The fee can vary depending on the type of credit card the consumer uses.

In the 2010 legislative session, seven states introduced legislation addressing credit cards and merchant fees. Vermont enacted legislation regulating credit card electronic payment systems.

Click here to review the 2009 legislation.

Click here to review the 2008 legislation.

Click here to review the 2007, 2006 and 2005 legislation.

GA | MA | NJ | NY | OH | VT | WI

STATES	BILL SUMMARY
Alabama	none
Alaska	none
Arizona	none
Arkansas	none
California	none
Colorado	none
Connecticut	none
Delaware	none
District of Columbia	none
Florida	none
Georgia	H.B. 1456 Prohibits certain practices by credit card companies.
Guam	none
Hawaii	none
Idaho	none
Illinois	none
Indiana	none
Iowa	none
Kansas	none
Kentucky	none
Louisiana	none
Maine	none
Maryland	none
Massachusetts	H.B. 238 Provides a definition for "retail merchant" as a business with at least 80 percent of its credit card transactions conducted through a credit card terminal and provides that no card issuer shall charge to any retail merchant more than seventy-five hundredths of 1 percent 0.75% per transaction for all processing fees involving the use of a credit or debit card. Each violation of a subsection (a) constitutes an unfair and deceptive act and shall be subject to the procedures and penalties prescribed.
	H.B. 323 Memorializes the Congress of the United States to address the escalating electronic payment interchange rates that merchants and consumers are assessed.
	H.B. 949 Amends Chapter 140E regarding credit card merchant agreements.
	H.B. 3564 Relates to fair dealing in credit card merchant agreements.
	H.B. 3888 Regulates credit card interchange fees.
	H.B. 3896 Relates to merchant credit card fees.
	S.B. 2013 Memorializes the Congress of the United States to address the escalating electronic payment interchange rates that merchants and consumers are assessed.
Michigan	none
Minnesota	none
Mississippi	none
Missouri	none
Montana	none
Nebraska	none
Nevada	none
New Hampshire	none
New Jersey	S.B. 1631 This bill prohibits a financial institutional that issues a credit card or debit card from charging any fee based on the sales and use tax portion of a retail sales transaction. A person who violates the provisions of the bill is subject to a civil penalty of up to $5,000. Any civil penalty imposed may be collected with costs in a summary proceeding pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.) by the attorney general or the functional regulator with jurisdiction over regulation of the financial institution.
New Mexico	none
New York	A.B. 4994 S.B. 3435 S.B. 7311 Relates to merchants access to credit card rules and rates; provides that issuing banks or credit card companies provide copies of rules and rates to merchants.
North Carolina	none
North Dakota	none
Ohio	H.B. 545 Enacts §§1319.21, 1319.22, 1319.23, and 3741.15 of the Revised Code to require disclosure to a merchant of the operating rules referenced in, or otherwise applicable as terms and conditions of, an electronic payment system contract, to permit the merchant to disclose operating rule information, to permit a retail dealer of gasoline to offer discount prices for gasoline purchases made by cash, debit card, check, or any similar means rather than by credit card, and to prohibit a franchise contract from limiting a franchisee from offering such a discount.
Oklahoma	none
Oregon	none
Pennsylvania	none
Puerto Rico	none
Rhode Island	none
South Carolina	none
South Dakota	none
Tennessee	none
Texas	none
Utah	none
Vermont	S.B. 138 Became law without governor’s signature 5/12/10, Act 116 Provides that no electronic payment system may directly or through any agent, processor or member of the system impose any requirement, condition, penalty, or fine in a contract with a merchant to inhibit the ability of any merchant to provide a discount or other benefit for payment through the use of other forms of payment or to impose any requirement, condition, or fine to prevent the ability to set a minimum dollar value; requires reimbursement and a civil penalty for a violation.
Virginia	none
Washington	none
West Virginia	none
Wisconsin	S.B. 105 Failed to pass pursuant to Senate Joint Resolution 1 4/28/10 Prohibits a depository institution, such as a bank, savings and loan association, or credit union, or another processor of payment cards, which include credit cards and certain debit cards and gift cards, from entering into an agreement with a merchant related to acquiring or processing payment card transactions unless the depository institution or other processor provides the merchant with a complete schedule of all service and transaction fees and rates applicable to the merchant’s transactions and a copy of all payment card association rules, regulations, and bylaws applicable to the merchant’s transactions. A similar prohibition is imposed on payment card issuers that own or operate their own payment card processing network. A depository institution, other payment card processor, or payment card issuer that violates this prohibition may not charge back to the merchant any reversed transaction of the merchant. A depository institution, other payment card processor, or payment card issuer that willfully and knowingly violates either of these prohibitions may be fined not more than $2,000.
Wyoming	none