BURLINGTON, Vt. (5/3/10)--A card acceptance bill that could affect how consumers use their credit and debit cards at merchant locations in Vermont has passed the state Senate, according to the Association of Vermont Credit Unions (AVCU). Vermont Gov. Jim Douglas is expected to sign the legislation into law when it arrives on his desk, AVCU said. On Thursday, the Vermont House of Representatives voted to send a scaled down version of S. 138 back to the Senate by a vote of 139-0 (Newslines Express
April 30). AVCU, Vermont credit union leaders and experts from payment processors, card companies and Vermont banks have told legislators that S.138 was bad consumer legislation that could negatively affect the ability of consumers to use their credit and debit cards at merchant locations statewide. Although all parties on the card-issuing side of the merchant transaction--and card networks themselves--still strongly oppose the bill, opposition by AVCU and others resulted in improvements, AVCU said. Key changes include:
* Removal of language that could have allowed surcharging by merchants for payment by credit or debit card; * The setting of an allowable minimum plastic card transaction of no more than $10, which must be prominently displayed at point of sale. Merchants previously sought a limitless minimum of their choosing; * Merchants will not be required to accept plastic at all of their locations; however, this was already the case under most network regulations; * Statutory penalties for violations by networks of certain provisions having to do with locations, minimums and discounts have been limited to offenses in those areas only, as opposed to prior language which opened the door for penalties against all kinds of other possible violations; * A confusing definition of “processor,” which could have unintentionally included credit union card processors--as opposed to merchant processors--or credit unions as processors, has been eliminated; and * The bill’s provisions apply only to merchants with a physical presence in Vermont.
The House version also moved the effective date for many of the provisions from July 1 to Jan. 1. The House bill altered the Senate version’s mandate that Vermont’s financial institution regulator conduct a study of the impact of direct interchange fee negotiation between merchants and card issuers. The report, due by Dec. 15, requires the regulator to compile results of already performed studies and make recommendations back to the legislature. One provision never in contention by any of the parties remains unchanged between House and Senate. It makes the possession of card skimming devices illegal and carries a penalty of 10 years imprisonment and up to a $10,000 fine.