ALBANY, N.Y. (6/25/10)--The Credit Union Association of New York and organizations representing consumers and seniors in the state are trying to ban surcharges on debit cards, which are used for consumer purchases and access to government benefits. The organizations joined New York State Sen. Eric Schneiderman (D-31) to call for passage this week of a bill he sponsors (S.7267-B) and similar legislation in the state Assembly. The groups also called for the Senate and the Assembly to agree on surcharge legislation and to pass it into law before the end of the session. “Aside from using cash, debit cards are the most financially responsible means for consumers to avoid debt through making purchases they can’t afford,” said Amy Kramer, vice president for government affairs for the Credit Union Association of New York. “In today’s economic climate, the legislature should follow the credit unions’ lead and do all it can to encourage thrift among New York’s consumers. “Our 451 not-for-profit credit unions and their 4.4 million members are also concerned that merchants will discriminate against debit cards issued by smaller financial institutions, resulting in higher costs and less consumer choice,” she added. In 1984, New York banned surcharges on credit cards, but not debit cards, since debit cards were not commonly used. Legislation is needed to close this loophole now that debit cards have become an increasingly common form of payment, according to a release from the press conference. Maine and Kansas have already banned debit card surcharges, and other states are considering similar legislation. “It is a fundmental principle of consumer protection that merchants can’t advertise one price and then charge a higher price at the checkout counter,” Schneiderman said. “But that’s exactly what’s happening when consumers are stuck with a fee just for using a debit card. State law doesn’t allow surcharges on credit card purchases, and it shouldn’t allow them for debit cards either. “Seniors and other consumers are under enough economic stress already: they shouldn’t have to pay another tax just to access their benefits or buy the everyday goods they need to get by,” he added. Debit cards are now used by many New Yorkers to access government benefits like unemployment and public assistance. Social Security payments will be accessed by debit cards beginning in 2013. The bill makes clear that offering discounts to induce customers to pay by cash or check is not prohibited, because this does not present an issue of consumer deception. The Senate bill also permits surcharges if a consumer receives cash back after making a debit card purchase, but only on the cash received, not the entire purchase. State Rep. Audrey Pheffer (D-23) has sponsored a similar bill (A.10430-A) in the Assembly, the press release said.