Payment Card Network Practices & Fees

The bill enacts the "Swipe Fee Fairness and Consumer Safeguards Act" (act), which prohibits a payment card network from:

• Fixing or conspiring to fix an interchange fee with, or on behalf of, a covered credit card issuer or another payment card network;
• Establishing, putting forward, or implementing a fee schedule that the payment card network knows, or reasonably should know, has been used by a covered credit card issuer other than the payment card network to determine the amount of an interchange fee charged or received by the covered credit card issuer in the current or previous calendar year;
• Establishing, charging, or putting forward on a fee schedule an interchange fee if the fee includes a percentage multiplied by the amount of a transaction and the fee does not exclude any amount attributable to a tax or gratuity on the transaction, or increasing fees in an attempt to or in a manner that would circumvent such interchange fee prohibition;
• Requiring a merchant that accepts credit cards that are enabled for processing over the payment card network to accept all credit cards issued by a covered credit card issuer that are enabled for processing over the payment card network;
• Distributing, publishing, or otherwise using data from an electronic payment transaction, except in certain circumstances;
• Charging a fee to a consumer or merchant related to a disputed credit card transaction until the dispute has been resolved and the consumer or merchant has been provided written notice of the determination; or
• Imposing a penalty on a merchant for setting prices in a manner that complies with state and federal law.

The bill prohibits a payment card network from establishing, putting forward, or implementing a fee schedule that the payment card network knows or reasonably should know has been used by one or more issuers other than the payment card network to determine the amount of an interchange fee received or charged in respect to a charitable contribution, unless the interchange fee does not exceed:

• 0.2% of the amount of a charitable contribution made by means of a debit card; or
• 0.3% of the amount of a charitable contribution made by means of a credit card.

If a payment card network violates the act, a merchant, consumer, or other individual or entity that is injured as a result may bring a civil action. A payment card network that is found to have violated the act as a result of a civil action other than a certified class action is liable in an amount equal to the sum of:

• The greater of:
• The amount of actual damages sustained plus interest; or
• $500; or
• 3 times the amount of actual damages sustained if the payment card network engaged in bad faith conduct; plus
• The costs of the action plus reasonable attorney fees.

If a payment card network is found liable in a certified class action, a successful plaintiff may recover actual damages, injunctive relief allowed by law, and reasonable attorney fees and costs.

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)