Sacramento wants to limit debit card fees

August 5, 2010

The state Assembly is expected to take up a bill this week, already passed in the Senate, that would make it illegal for merchants to charge debit card fees. [Chronicle]

The legislation, originally introduced by state Senator Jenny Oropeza (D-Long Beach), wants to eliminate all debit fees, believing them to be unfair and discriminatory.

“More and more people are turning toward debit cards – they now account for more than half of retail transactions nationwide,” said Oropeza staff consultant Brendan Hughes, who wrote the measure and argued that it will help less-affluent Californians. “If you can’t charge something on a credit card, then the purchase price of paying with a debit card is higher than credit. … This is affecting the most susceptible of Californians, and we need to protect them.”

Debit transaction fees normally range between 45 cents and $1. Credit card users are exempt from the fees because of legislation passed 25 years ago.

The measure is supported by some consumer groups and payment networks such as Visa, which controls an estimated 75 percent of the country’s debit card market. Although Visa does not allow debit fees, many merchants charge them anyway, according to business leaders.

Atlantic Richfield Co., owned by British Petroleum, and a number of business associations that represent small merchants oppose the bill, saying it will hurt consumers and merchants.

The bill passed the state Senate on a vote of 22 to 9.

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5 Comments

  1. SLORider says:

    The very day that fees are banned, the price of goods will go up. We’re already subsidizing credit card fees (thanks to the same stupid legislation already passed).

    ALL THIS WILL ACCOMPLISH IS FORCE CASH BUYERS TO SUBSIDIZE CARD USERS. PERIOD.

    Like or Dislike: Thumb up 1 Thumb down 2

  2. ThomasPaine says:

    There is no such thing as the free market. This legislation is long overdo and should just be the beginning.

    Like or Dislike: Thumb up 4 Thumb down 1

  3. mkaney says:

    One way or another, the fees will be charged. Whether they manifest in a different service, or the vendor ends up having to pay higher fees, they do not just *disappear*. Sacramento and Washington D.C. need to STOP interfering with the market… it is not the free market that causes our problems, it is the CRONY capitalism that it created as a result of regulation which may sound good but creates opportunities for unethical corporations to eliminate compeition, receive lucrative contracts, and/or lobby to further their interests overall.

    Like or Dislike: Thumb up 4 Thumb down 3

  4. Willow says:

    I never understood this idea of people paying to access or use their own money.
    I mean, it’s not like the bank isn’t making money off your deposited funds already anyway.

    Like or Dislike: Thumb up 10 Thumb down 1

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