A bill that would change the way businesses charge debit card fees, which recently passed the California Legislature, is now awaiting the signature of Governor Arnold Schwarzenegger.
According to a report in the San Francisco Chronicle, the measure would prevent businesses from passing the cost of paying for “swipe fees” on debit card purchases onto consumers if the advertised price of an item is different from what they’re charged for using a card. While federal law now prohibits businesses from charging like this when consumers take on credit card debt, no such restriction is in place for debit cards.
The bill’s supporters – which included Visa – say that the law closes a loophole in the federal law, and will save consumers money. However, its opponents point out that small businesses, the ones most likely to charge more for this reason, will lose tens of thousands of dollars paying these fees themselves.
U.S. Representative Barney Frank pushed for a provision of this nature to be included in federal law, but it met such fervent opposition that it was erased from the bill.