DENVER -- A bill aimed at stopping banks from charging interchange fees on the sales-tax portion of a purchase died when Colorado legislators instead suggested a study about the issue, reported The Denver Post.
Bankers called a proposed study of interchange fees "biased" and "unfair" because the outcome, they said, appeared to be predetermined toward legislating the interchange fees.
After a hearing before the House Finance Committee, the bill was killed in a nine-to-two vote because little money exists to do a study that some said can't be done, the report said.
Bankers say it's unfair to expect them to provide a service--guarantee merchants and the government their payment from the transaction--without the bankers being paid.
Bill sponsors changed their legislation, offering instead to study the issue, especially the assertion that it's too complex to separate the various expenses of a credit-card purchase.
The study would have to be finished by October, a deadline even state employees say is unreasonable.
A number of small-business representatives testified to the costs they bear whenever a consumer uses a credit card. Paying extra for card issuers to collect sales taxes eats more into their paper-thin profits.
"The taxes we collect and pay were about $5 million last year," Scott Paulson, president of the Colorado Wyoming Petroleum Marketers Association, said. "My cost to take credit cards is my second-largest expense for each store. Ironically, [credit-card processors] make more on my selling gas than I make on it."
Click here to view the full Denver Post report.
Meanwhile, in Texas last week, the National Association of Shell Marketers (NASM) filed an amicus curiae (friend-of-the-court) brief in Speedy Stop Food Stores Inc. et al. v. Visa Inc. et al., Case No. 13-10-75377-A, in the District Court of Victoria County, Texas, NASM reported in a legal bulletin.
In the Texas case, four branded petroleum marketers that opted out of the nationwide Visa-MasterCard class-action settlement in New York, filed their own, separate lawsuit against Visa and MasterCard alleging antitrust claims similar to those asserted by the plaintiff class members in the New York class action.
Visa and MasterCard have asked the Texas court to dismiss the case based on their contention that branded petroleum retailers have no standing to assert such antitrust claims because they supposedly do not pay directly the credit-card interchange fees that are deducted from the proceeds of credit-card transactions at branded retail locations.
Visa and MasterCard have made the same argument in the New York class action that they have raised in the Texas case. Consequently, the question of whether branded retailers will ultimately be able to receive any portion of the proceeds that are to be distributed pursuant to the settlement in the New York Visa-MasterCard class action is currently unresolved, said NASM.
Because the ruling by the Texas state court could possibly set an important precedent on this issue, NASM filed its amicus curiae brief in support of the Texas marketers' position that they do pay such interchange fees directly and, therefore, have standing to asset their antitrust claims against Visa and MasterCard concerning those fees.
Click here to view a complete copy of NASM's brief.
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