| AI Summary |
This bill introduces regulations on payment card networks to prevent unfair swipe fees and protect merchants and consumers from excessive or deceptive credit card transaction fees.
Key Provisions of the Bill
Prohibited Practices for Payment Card Networks
A payment card network CANNOT:
- Fix or conspire to fix interchange fees with a credit card issuer or another payment network.
- Establish a fee schedule that a credit card issuer has previously used to determine interchange fees.
- Charge an interchange fee that includes a percentage of a transaction's total amount unless:
- The fee excludes amounts attributable to taxes or gratuities.
- Fees are not increased in a way that circumvents this rule.
- Force merchants to accept all credit cards from a particular issuer if they accept some credit cards from that issuer.
- Use data from electronic transactions unless in specific permitted circumstances.
- Charge fees on disputed transactions until the dispute is resolved and the consumer or merchant receives written notice of the decision.
- Penalize merchants for setting prices in compliance with state and federal law.
Limits on Charitable Contribution Fees
A payment card network CANNOT impose a high interchange fee on charitable donations. The maximum fees allowed:
- Debit card transactions: 0.2% of the donation amount.
- Credit card transactions: 0.3% of the donation amount.
Penalties & Legal Remedies
Who Can Sue for Violations?
- Merchants, consumers, or any entity injured by a violation of the act.
Damages for Civil Actions (Non-Class Action Lawsuits)
A payment card network found guilty of violating the act must pay the greater of:
- Actual damages sustained + interest OR $500.
- If bad faith is proven: 3 times the actual damages.
- Plus: Legal costs and attorney fees.
Penalties in Certified Class Action Lawsuits
- Successful plaintiffs may recover:
- Actual damages
- Injunctive relief (court orders to stop illegal practices)
- Reasonable attorney fees and costs
Key Takeaways
- Protects merchants & consumers from unfair swipe fees and pricing practices by payment card networks.
- Restricts excessive fees on charitable donations.
- Prevents forced acceptance of all cards from a single issuer.
- Requires fair dispute resolution before imposing fees.
- Allows legal action against payment card networks for violations, with significant penalties for bad-faith conduct.
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| Summary |
The bill enacts the Swipe Fee Fairness and Consumer Safeguards
Act (act), which prohibits a payment card network from:
•
Fixing or conspiring to fix an interchange fee with, or on
behalf of, a covered credit card issuer or another payment
card network;
•
Establishing, putting forward, or implementing a fee
schedule that the payment card network knows, or
reasonably should know, has been used by a covered credit
card issuer other than the payment card network to
determine the amount of an interchange fee charged or
received by the covered credit card issuer in the current or
previous calendar year;
•
Establishing, charging, or putting forward on a fee
schedule an interchange fee if the fee includes a percentage
multiplied by the amount of a transaction and the fee does
not exclude any amount attributable to a tax or gratuity on
the transaction, or increasing fees in an attempt to or in a
manner that would circumvent such interchange fee
prohibition;
•
Requiring a merchant that accepts credit cards that are
enabled for processing over the payment card network to
accept all credit cards issued by a covered credit card issuer
that are enabled for processing over the payment card
network;
•
Distributing, publishing, or otherwise using data from an
electronic payment transaction, except in certain
circumstances;
•
Charging a fee to a consumer or merchant related to a
disputed credit card transaction until the dispute has been
resolved and the consumer or merchant has been provided
written notice of the determination; or
•
Imposing a penalty on a merchant for setting prices in a
manner that complies with state and federal law.
The bill prohibits a payment card network from establishing,
putting forward, or implementing a fee schedule that the payment card
network knows or reasonably should know has been used by one or more
issuers other than the payment card network to determine the amount of
an interchange fee received or charged in respect to a charitable
contribution, unless the interchange fee does not exceed:
•
0.2% of the amount of a charitable contribution made by
means of a debit card; or
•
0.3% of the amount of a charitable contribution made by
means of a credit card.
If a payment card network violates the act, a merchant, consumer,
or other individual or entity that is injured as a result may bring a civil
action. A payment card network that is found to have violated the act as
a result of a civil action other than a certified class action is liable in an
amount equal to the sum of:
•
The greater of:
•
The amount of actual damages sustained plus
interest; or
•
$500; or
•
3 times the amount of actual damages sustained if
the payment card network engaged in bad faith
conduct; plus
•
The costs of the action plus reasonable attorney fees.
If a payment card network is found liable in a certified class
action, a successful plaintiff may recover actual damages, injunctive relief
allowed by law, and reasonable attorney fees and costs.
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