Electronic Payments Coalition today applauded Governor Jared Polis for vetoing SB 26-134, legislation that would have imposed unworkable mandates and forced credit and debit cards to operate differently in Colorado than virtually anywhere else in the world. These changes would have created significant confusion and operational disruption for consumers, small businesses, financial institutions, and the state’s critical tourism and travel economy.
“Governor Polis made the prudent and responsible decision for Colorado,” said EPC Executive Chairman Richard Hunt. “This bill would have created chaos for merchants and consumers alike, threatened popular credit card rewards programs millions of Coloradans rely on, and placed community banks and credit unions in an impossible position. The Governor recognized that protecting consumers, small businesses, union jobs, and Colorado’s economy – especially in communities dependent on tourism – had to come first.”
The legislation also posed serious risks to Colorado’s tourism sector and the thousands of good-paying union jobs supported by the state’s travel and airline industries. The coalition warned the bill could have created confusion for visitors traveling to and within Colorado while undermining the seamless electronic payments system consumers and businesses depend on every day.
“Colorado’s tourism economy is one of the state’s greatest economic strengths, and Governor Polis has worked hard to help it grow,” Hunt continued. “This legislation threatened to inject uncertainty and friction into the payment systems visitors and businesses rely on every day. We applaud the Governor for rejecting this deeply flawed proposal and preventing Colorado from becoming the next Land of Credit Card Chaos.”
SB 26-134 sought to prohibit interchange, the amount merchants pay for card processing services, on the tax portions of credit and debit transactions. The legislation mirrored the controversial Illinois Interchange Fee Prohibition Act (IFPA), which remains tied up in ongoing federal litigation. Federal regulators, including the Office of the Comptroller of the Currency, have reaffirmed that the National Bank Act preempts state laws attempting to regulate nationally chartered financial institutions and the national payments system.
More than two dozen states have considered similar interchange legislation in recent years, but concerns over litigation, federal preemption, implementation costs, consumer confusion, and fiscal impacts on state and local governments have stalled or derailed many of the proposals.
Interchange supports the secure and efficient electronic payments system consumers rely on every day, including fraud protection, rewards programs, instant payment processing, and the maintenance of checking accounts and other banking services.
