The Vermont State Senate Judiciary Committee recently approved a bill that would restrict interchange fees levied on merchants by credit card companies each time a card is used for payment.¬† Should the legislation be signed into law, the state would become the first to regulate these charges.
The bill, S. 138, plainly titled "An Act Relating to Credit Card Fees," passed the Judiciary Committee with an amendment proposed by State Senate President Pro Tem Peter Shumlin (D) that would prohibit credit card companies from fining merchants for offering discounts to customers who use a credit card that costs less for the merchant to accept. The legislation would also allow merchants to set minimum or maximum transaction amounts without being fined or penalized by credit card companies and prohibit credit card companies from mandating the acceptance of all of their cards if the merchant chooses to accept only one of them.
The credit card industry is typically regulated by the federal government, which enacted the Credit Card Accountability Responsibility and Disclosure (Credit CARD) Act in May 2009. While the bill only went into effect last month, many argue that the credit card industry has already found routes around its provisions. Furthermore, the legislation included no measures aimed at addressing interchange fees, also known as swipe fees, charged of merchants whenever a customer uses a credit card for payment.
The passage of the bill through committee drew cheers from the Merchants Payments Coalition, an association representing businesses and advocating nationwide reform to rein in credit card interchange fees. "We applaud Senate President Pro Tem Peter Shumlin, Majority Leader John Campbell, Judiciary Committee Chairman Richard Sears, Assistant Minority Leader Kevin Mullin and the Vermont Senate Judiciary Committee for taking this critical stand on behalf of Vermont businesses and their customers," said Lyle Beckwith, Senior Vice President of the National Association of Convenience Stores, on behalf of the coalition. "Credit card swipe fees are one of the largest expenses small businesses face and these huge, hidden fees hurt small businesses and consumers at the very time we're relying on them to rebuild our economy."
Jacob Barron, NACM staff writer