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CU System
Utah Governor Signs Surcharge-Ban Bill
SALT LAKE CITY (4/5/13)--Utah became the 11th state to prohibit merchants from imposing a surcharge on credit/debit card and other transactions--at least temporarily. Gov. Gary Herbert signed Senate Bill 67 into law on Monday.

The law will expire after one year, at which time the issue will go back before the legislature, according to S.B. 67's sponsor, Republican state Sen. Curtis Bramble (American Banker April 4).   The legislation will maintain the status quo, while state lawmakers take a closer look at the issue.

In addition to the 11 states with bills banning surcharges already on the books, 17 others are considering similar measures in their legislatures.

The Credit Union National Association and state leagues are monitoring the bills' progress, noting that any surcharge on card transactions would impact all financial institutions, including credit unions, as well as consumers and credit union members.

The bills were prompted by a surcharge provision in a $7.2 billion antitrust lawsuit settlement between merchants and Visa, MasterCard and their banks. The provision became effective Jan. 27. It permits merchants to charge a "checkout fee" equal to what the merchant pays to accept the card. That fee is typically 1.5% to 3% in the U.S., but is not to exceed 4%. Prior to the settlement, 10 states had laws banning surcharges.

The 11 states with surcharge bans on the books include: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas, and now Utah. However, Maine has a proposal that would ease its surcharge ban.

Bills to block surcharges are either being considered or have been introduced in these states: Arkansas, Hawaii, Illinois, Indiana, Kentucky, Missouri, Maryland, Michigan, Nevada, New Jersey, New Mexico, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont and West Virginia.


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