MONTPELIER, Vt. (4/2/10)--A final reading and vote on an amended credit card bill that would give Vermont merchants the power to refuse some credit cards is expected in the Vermont Senate today, according to the Association of Vermont Credit Unions (AVCU). SB 138, which if passed would be the first state law in the nation on the issue, is opposed by credit unions, banks and electronic payments processors and favored by the merchants and their associations. The bill began as a consumer protection bill that largely duplicated the federal Credit Card Accountability, Responsibility and Disclosures (CARD) Act, but it has ended up a merchant protection bill, said Joe Bergeron, AVCU president/CEO. Credit unions and others activated their grassroots efforts and over last weekend met with legislators to lobby against the bill on the basis that it duplicated the federal act and the state should let the federal act play out before attempting to address the issue. On Tuesday the bill had only half of the Senate's support at the first reading. However, the 11th hour amendments offered Wednesday by the merchants' groups in a so-called "compromise" bill, received the full support of the Senate. The legislation is ill-conceived, said Bergeron. "We understand the merchants' dilemma and we're willing to work with them, but we can't go along with legislation that favors one side--the merchants--and hurts all the others, including credit unions, banks and processors and consumers," he told News Now
. The measure needs a thorough examination by those knowledgeable about the payments process, he said. The latest amended version of the bill, which passed a second reading, 30-0 on Wednesday, would:
* Allow merchants to set minimum and maximum amounts for acceptance of debit and credit cards. * Forbid electronic payments system network processors from imposing penalties or requirements on the way merchants advertise, thus allowing merchants to add a surcharge for customers using a credit or debit card. Bergeron noted that merchants already can allow a discount for using cash. * Require a state regulatory study, due Dec. 15, 2011, to determine the economic impact on banks, credit unions and consumers of prohibiting electronic networks from inhibiting merchants as to whose cards they can not accept.
The bill would result in "Vermont becoming an island in the electronic funds transfer (EFT) world," Bergeron said. "It will have a negative effect on cardholders from credit unions and banks...who will find surcharges when they go skiing in Vermont, or find they can't use their card because they're not spending enough or spending too much," he said. The bill would be detrimental to credit unions, he said. "I'm a credit union and I give my member a card. And the member finds it's not working at certain locations. I have to decide whether to continue to issue plastic." He noted it was also bad for Vermont's economy. "It's a very complicated issue and not an easy fix." If passed today, the bill then goes to the House. AVCU is already addressing the issues with some House members but much will depend on which committee gets the bill. Vermont is already two-three weeks past the date in which bills can cross over from one legislative chamber to the other. There likely would not be much work on the bill until after the holiday "so there's not a lot of time," Bergeron told News Now
. AVCU and credit unions will get a critical opportunity to lobby their case with lawmakers on Thursday afternoon during credit unions' Legislator Appreciation Reception, he said.