Relating to a limitation on certain fees a credit card issuer may charge a merchant for processing a credit card sale; authorizing a civil penalty.
Impact
The enactment of HB 4626 would amend the Business & Commerce Code by introducing Chapter 604B, which explicitly restricts credit card issuers' fees. The bill includes provisions for a civil penalty of 5% of the violative portion of the credit card sale, to be enforced by the Attorney General or local prosecutors. This change is anticipated to create a more favorable environment for merchants by controlling excessive fees and encouraging fairer practices among credit card issuers.
Summary
House Bill 4626 seeks to place a limitation on the fees that credit card issuers can charge merchants when processing credit card sales. Specifically, the bill states that credit card issuers cannot impose a fee on merchants for sales that include tax amounts exceeding 1.75% of that tax. This legislative measure is aimed at providing financial relief to merchants by reducing the cost burdens they face from credit card processing fees, particularly regarding sales taxes.
Sentiment
The sentiment around HB 4626 appears to be largely supportive among merchants and advocates for small businesses. They argue that lowering processing fees will enhance profitability and sustainability, particularly for small businesses that typically operate on tighter margins. However, there may be concerns from credit card issuers regarding the implications of the fee limitations on their business models, which could lead to broader debates about the balance of interests between financial institutions and merchants.
Contention
Notable points of contention may arise concerning how such regulations might affect the overall landscape of credit card processing and merchant services. Critics of the bill might argue that imposing a restriction on fees could lead to increased costs in other areas or limit the suite of services that credit card companies provide. Additionally, questions remain regarding the enforcement of these penalties and the potential for unintended consequences in the marketplace.
Relating to anticompetitive and other unlawful practices and to certain required disclosures relating to credit card transactions; providing a civil penalty.