BILL ANALYSIS Senate Research Center S.B. 2056 89R5341 SRA-D By: Hancock Business & Commerce 4/1/2025 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT There is severe lack of competition and transparency in two of the three stages of the U.S. credit card marketthe card network segment and the card issuing bank segment. Two companies control over 76 percent of the U.S. card network segment; ten banks control over 80 percent of the U.S. credit card issuing segment. Consumers do not see credit or debit card processing fees on receipts or their card statements, and yet the average American family can pay thousands of dollars a year through these costs. For main street businesses like restaurants and gas stations that pay the fees directly (merchants), a single bill can contain over 100 different types of fees that are dictated by factors outside of the merchant's control (e.g., which specific card a consumer uses, whether they enter a pin number). Due to the lack of competition, transparency, and oversight, U.S. credit card processing fees are the highest in the industrialized world and continue to climb. American credit card processing fees have more than doubled over the past decade, including increases over 50 percent since 2020. On average, Americans now pay about six times the rate paid in Europe. According to reports, in 2023, U.S. interchange and network fees alone totaled over $116 billion. S.B. 2056 seeks to create competition and transparency regarding the cost of hidden credit card processing fees that cost Texas consumers and main street businesses over $10 billion a year. As proposed, S.B. 2056 amends current law relating to unlawful practices relating to credit card transactions and provides a civil penalty. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 12, Business & Commerce Code, by adding Chapter 604B, as follows: CHAPTER 604B. UNLAWFUL PRACTICES RELATING TO CREDIT CARD TRANSACTIONS SUBCHAPTER A. GENERAL PROVISIONS Sec. 604B.001. DEFINITIONS. Defines "assessment fee," "cardholder," "credit card," "credit card issuer," "credit card transaction," "fee schedule," "interchange fee," "merchant," "payment card network," and "swipe fee." SUBCHAPTER B. CREDIT CARD ISSUERS Sec. 604B.051. APPLICABILITY. Provides that this subchapter applies only to a credit card issuer that, together with any affiliates, had consolidated worldwide banking and nonbanking assets, including affiliate assets, other than trust assets under management, of more than $85 billion at any point during the previous calendar year. Sec. 604B.052. PROHIBITED PRACTICES BY CREDIT CARD ISSUER. Prohibits a credit card issuer from: (1) fixing or conspiring to fix a swipe fee with, or on behalf of, another credit card issuer or payment card network; (2) receiving or charging an interchange fee with respect to a credit card transaction in an amount that is included on or determined by a fee schedule that has been fixed, established, or recommended by a payment card network or that the credit card issuer knows, or reasonably should know, is being used in the same calendar year by another credit card issuer subject to this subchapter to determine the amount of an interchange fee with respect to a credit card transaction that issuer receives or charges; (3) charging a cardholder or a merchant a fee due to a disputed credit card transaction unless a finding of fact concludes that the cardholder or merchant is responsible for the disputed transaction and the cardholder or merchant is provided written notification of the finding of fact; or (4) prohibiting or penalizing a merchant that offers a cardholder a discount for using cash, a debit card, or a gift card instead of a credit card for payment. Sec. 604B.053. REQUIRED DISCLOSURE OF SWIPE FEES TO CARDHOLDERS. Requires a credit card issuer to disclose in a clear and conspicuous manner on a monthly statement sent to a cardholder that has been issued a credit card by the credit card issuer if one or more swipe fees have been charged to the cardholder on a credit card transaction and the amount of the swipe fee charged to the cardholder on a credit card transaction. SUBCHAPTER C. PAYMENT CARD NETWORKS Sec. 604B.101. PROHIBITED PRACTICES BY PAYMENT CARD NETWORK. Prohibits a payment card network from: (1) fixing or conspiring to fix a swipe fee with, or on behalf of, another credit card issuer or payment card network; (2) requiring a merchant to accept as payment any credit card issued by the credit card issuer; (3) charging a cardholder or a merchant a fee due to a disputed credit card transaction unless a finding of fact concludes that the cardholder or merchant is responsible for the disputed credit card transaction and the cardholder or merchant is provided written notification of the finding of fact; or (4) prohibiting or penalizing a merchant that offers a cardholder a discount for using cash, a debit card, or a gift card instead of a credit card for payment. Sec. 604B.102. DISCLOSURE BY PAYMENT CARD NETWORKS OF FEES CHARGED TO MERCHANTS. Requires a payment card network, not later than the 45th day after the date of the credit card transaction, to disclose in a clear and conspicuous manner to the merchant or another person who assists the merchant in processing credit card transactions and who has been designated by the merchant to receive the disclosures, the rate and total amount of each swipe fee or other fee charged on each credit card transaction. SUBCHAPTER D. ENFORCEMENT Sec. 604B.151. INVESTIGATION BY ATTORNEY GENERAL. Authorizes the attorney general, if the attorney general is made aware or independently learns of a violation of this chapter, to investigate the alleged violation to the same extent and in the same manner as an alleged antitrust violation under Chapter 15 (Monopolies, Trusts and Conspiracies in Restraint of Trade). Sec. 604B.152. CIVIL SUITS FOR ANTICOMPETITIVE VIOLATIONS. Authorizes the attorney general to file suit in district court in Travis County or in any county in the State of Texas in which any of the named defendants resides, does business, or maintains its principal office on behalf of the State of Texas to collect a civil fine from any person whom the attorney general believes has violated any of the prohibitions in Section 604B.052(1) or (2) or Section 604B.101(1) or (2). Requires an individual or other person adjudged to have violated any of these prohibitions to pay a fine to the state in an amount not to exceed: (1) if an individual, $300,000; or (2) if any other person: (A) $3 million, if the lesser of the person's assets or market capitalization is less than $100 million; (B) $20 million, if the lesser of the person's assets or market capitalization is at least $100 million but less than $500 million; or (C) $30 million, if the lesser of the person's assets or market capitalization is $500 million or more. Sec. 604B.153. INJUNCTIVE RELIEF. Authorizes the attorney general to file suit against any person in district court in Travis County or in any county in the State of Texas in which any of the named defendants resides, does business, or maintains its principal office on behalf of the State of Texas to enjoin temporarily or permanently any activity or contemplated activity that violates or threatens to violate any of the prohibitions in this chapter. Requires the court, in any such suit, to apply the same principles as those generally applied by courts of equity in suits for injunctive relief against threatened conduct that would cause injury to business or property. Requires the state, in any such suit in which the state substantially prevails on the merits, to be entitled to recover the cost of suit. Sec. 604B.154. TRANSFER OF SUIT. Provides that no suit filed under this subchapter is authorized to be transferred to another county except on order of the court. Sec. 604B.155. AUTHORITY OF ATTORNEY GENERAL NOT LIMITED. Requires that nothing in this subchapter be construed to limit the constitutional or common law authority of the attorney general to bring actions under state and federal law. Sec. 604B.156. MUTUALLY EXCLUSIVE REMEDIES. Provides that remedies available under Sections 604B.152 and 15.20(a) (relating to authorizing the attorney general to file suit in certain courts to collect a civil fine) are mutually exclusive. Sec. 604B.157. NO PRIVATE CAUSE OF ACTION. Provides that this chapter does not create a private cause of action. SECTION 2. Provides that, to the extent of a conflict between Section 604B.052(3) or (4) or Section 604B.101(3) or (4), Business & Commerce Code, as added by this Act, and a provision of a contract entered into before the effective date of this Act, the contract provision prevails. SECTION 3. Provides that, notwithstanding Section 604B.053, Business & Commerce Code, as added by this Act, a credit card issuer is not required to comply with that section until March 1, 2026. SECTION 4. Effective date: September 1, 2025.
BILL ANALYSIS
Senate Research Center S.B. 2056
89R5341 SRA-D By: Hancock
Business & Commerce
4/1/2025
As Filed
Senate Research Center
S.B. 2056
89R5341 SRA-D
By: Hancock
Business & Commerce
4/1/2025
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
There is severe lack of competition and transparency in two of the three stages of the U.S. credit card marketthe card network segment and the card issuing bank segment. Two companies control over 76 percent of the U.S. card network segment; ten banks control over 80 percent of the U.S. credit card issuing segment. Consumers do not see credit or debit card processing fees on receipts or their card statements, and yet the average American family can pay thousands of dollars a year through these costs. For main street businesses like restaurants and gas stations that pay the fees directly (merchants), a single bill can contain over 100 different types of fees that are dictated by factors outside of the merchant's control (e.g., which specific card a consumer uses, whether they enter a pin number).
Due to the lack of competition, transparency, and oversight, U.S. credit card processing fees are the highest in the industrialized world and continue to climb. American credit card processing fees have more than doubled over the past decade, including increases over 50 percent since 2020. On average, Americans now pay about six times the rate paid in Europe. According to reports, in 2023, U.S. interchange and network fees alone totaled over $116 billion.
S.B. 2056 seeks to create competition and transparency regarding the cost of hidden credit card processing fees that cost Texas consumers and main street businesses over $10 billion a year.
As proposed, S.B. 2056 amends current law relating to unlawful practices relating to credit card transactions and provides a civil penalty.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Title 12, Business & Commerce Code, by adding Chapter 604B, as follows:
CHAPTER 604B. UNLAWFUL PRACTICES RELATING TO CREDIT CARD TRANSACTIONS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 604B.001. DEFINITIONS. Defines "assessment fee," "cardholder," "credit card," "credit card issuer," "credit card transaction," "fee schedule," "interchange fee," "merchant," "payment card network," and "swipe fee."
SUBCHAPTER B. CREDIT CARD ISSUERS
Sec. 604B.051. APPLICABILITY. Provides that this subchapter applies only to a credit card issuer that, together with any affiliates, had consolidated worldwide banking and nonbanking assets, including affiliate assets, other than trust assets under management, of more than $85 billion at any point during the previous calendar year.
Sec. 604B.052. PROHIBITED PRACTICES BY CREDIT CARD ISSUER. Prohibits a credit card issuer from:
(1) fixing or conspiring to fix a swipe fee with, or on behalf of, another credit card issuer or payment card network;
(2) receiving or charging an interchange fee with respect to a credit card transaction in an amount that is included on or determined by a fee schedule that has been fixed, established, or recommended by a payment card network or that the credit card issuer knows, or reasonably should know, is being used in the same calendar year by another credit card issuer subject to this subchapter to determine the amount of an interchange fee with respect to a credit card transaction that issuer receives or charges;
(3) charging a cardholder or a merchant a fee due to a disputed credit card transaction unless a finding of fact concludes that the cardholder or merchant is responsible for the disputed transaction and the cardholder or merchant is provided written notification of the finding of fact; or
(4) prohibiting or penalizing a merchant that offers a cardholder a discount for using cash, a debit card, or a gift card instead of a credit card for payment.
Sec. 604B.053. REQUIRED DISCLOSURE OF SWIPE FEES TO CARDHOLDERS. Requires a credit card issuer to disclose in a clear and conspicuous manner on a monthly statement sent to a cardholder that has been issued a credit card by the credit card issuer if one or more swipe fees have been charged to the cardholder on a credit card transaction and the amount of the swipe fee charged to the cardholder on a credit card transaction.
SUBCHAPTER C. PAYMENT CARD NETWORKS
Sec. 604B.101. PROHIBITED PRACTICES BY PAYMENT CARD NETWORK. Prohibits a payment card network from:
(1) fixing or conspiring to fix a swipe fee with, or on behalf of, another credit card issuer or payment card network;
(2) requiring a merchant to accept as payment any credit card issued by the credit card issuer;
(3) charging a cardholder or a merchant a fee due to a disputed credit card transaction unless a finding of fact concludes that the cardholder or merchant is responsible for the disputed credit card transaction and the cardholder or merchant is provided written notification of the finding of fact; or
(4) prohibiting or penalizing a merchant that offers a cardholder a discount for using cash, a debit card, or a gift card instead of a credit card for payment.
Sec. 604B.102. DISCLOSURE BY PAYMENT CARD NETWORKS OF FEES CHARGED TO MERCHANTS. Requires a payment card network, not later than the 45th day after the date of the credit card transaction, to disclose in a clear and conspicuous manner to the merchant or another person who assists the merchant in processing credit card transactions and who has been designated by the merchant to receive the disclosures, the rate and total amount of each swipe fee or other fee charged on each credit card transaction.
SUBCHAPTER D. ENFORCEMENT
Sec. 604B.151. INVESTIGATION BY ATTORNEY GENERAL. Authorizes the attorney general, if the attorney general is made aware or independently learns of a violation of this chapter, to investigate the alleged violation to the same extent and in the same manner as an alleged antitrust violation under Chapter 15 (Monopolies, Trusts and Conspiracies in Restraint of Trade).
Sec. 604B.152. CIVIL SUITS FOR ANTICOMPETITIVE VIOLATIONS. Authorizes the attorney general to file suit in district court in Travis County or in any county in the State of Texas in which any of the named defendants resides, does business, or maintains its principal office on behalf of the State of Texas to collect a civil fine from any person whom the attorney general believes has violated any of the prohibitions in Section 604B.052(1) or (2) or Section 604B.101(1) or (2). Requires an individual or other person adjudged to have violated any of these prohibitions to pay a fine to the state in an amount not to exceed:
(1) if an individual, $300,000; or
(2) if any other person:
(A) $3 million, if the lesser of the person's assets or market capitalization is less than $100 million;
(B) $20 million, if the lesser of the person's assets or market capitalization is at least $100 million but less than $500 million; or
(C) $30 million, if the lesser of the person's assets or market capitalization is $500 million or more.
Sec. 604B.153. INJUNCTIVE RELIEF. Authorizes the attorney general to file suit against any person in district court in Travis County or in any county in the State of Texas in which any of the named defendants resides, does business, or maintains its principal office on behalf of the State of Texas to enjoin temporarily or permanently any activity or contemplated activity that violates or threatens to violate any of the prohibitions in this chapter. Requires the court, in any such suit, to apply the same principles as those generally applied by courts of equity in suits for injunctive relief against threatened conduct that would cause injury to business or property. Requires the state, in any such suit in which the state substantially prevails on the merits, to be entitled to recover the cost of suit.
Sec. 604B.154. TRANSFER OF SUIT. Provides that no suit filed under this subchapter is authorized to be transferred to another county except on order of the court.
Sec. 604B.155. AUTHORITY OF ATTORNEY GENERAL NOT LIMITED. Requires that nothing in this subchapter be construed to limit the constitutional or common law authority of the attorney general to bring actions under state and federal law.
Sec. 604B.156. MUTUALLY EXCLUSIVE REMEDIES. Provides that remedies available under Sections 604B.152 and 15.20(a) (relating to authorizing the attorney general to file suit in certain courts to collect a civil fine) are mutually exclusive.
Sec. 604B.157. NO PRIVATE CAUSE OF ACTION. Provides that this chapter does not create a private cause of action.
SECTION 2. Provides that, to the extent of a conflict between Section 604B.052(3) or (4) or Section 604B.101(3) or (4), Business & Commerce Code, as added by this Act, and a provision of a contract entered into before the effective date of this Act, the contract provision prevails.
SECTION 3. Provides that, notwithstanding Section 604B.053, Business & Commerce Code, as added by this Act, a credit card issuer is not required to comply with that section until March 1, 2026.
SECTION 4. Effective date: September 1, 2025.