AUSTIN, Texas–Two separate bills that would regulate credit card processing fees continue to work their way through this state’s legislature.
Similar to the landscape at the national level, the bills are opposed by financial institutions and supported by retailers and consumer groups.
The two pieces of legislation, SB 2056 and HB 4061 were introduced by Republicans Kelly Hancock of Fort Worth and Jared Patterson of Denton, respectively, in the Senate and House. The bills seek to regulate how interchange fees are set, with violations incurring a civil penalty.
What Bills Would Do
According to the Dallas Morning News, the bills would:
- Prohibit issuing banks from using standard interchange fee rates determined by payment card networks
- Prohibit the latter from requiring merchants to accept all their cards if the merchant accepts one
- Require disclosure of interchange fees charged on each transaction from issuing banks to cardholders, and from card networks to merchants.
The Senate version passed through the Committee on Business and Commerce after a substitute in mid-April, and was replaced on the Senate intent calendar earlier this week.
“But in the House, it’s been in limbo in the House Pensions, Investments & Financial Services,” the Dallas Morning News reported.
Seeking ‘Transparency’
In introducing the legislation, Hancock said in a statement the bill “seeks to create competition and transparency regarding the cost of hidden credit card processing fees.”
The statement further suggests that, due to a lack of competition, American card processing fees are the highest in the world and have more than doubled in the past decade, the report added.
The Texas Bankers Association has pushed back, arguing the reason interchange fees have increased is simply because of the growing prevalence of credit cards, the Dallas Morning News added.