May 27, 2010
-
News: Vermont First To Fight Interchange Fees
Disagreements between Vermont's governor and the state's lawmakers won't interfere with new credit card rules. Vermont's lawmakers passed the law that gives retailers more control over marketing special promotions to customers who use cash or other forms of payment that are less costly than processing credit card payments. The Vermont Retail Association and the Vermont Grocers Association lobbied in favor of the law that should save retailers millions of dollars a year. Governor James Douglas opposed the law saying he did not believe that state legislatures should be regulating the credit card business and that such legislation was best handled at the national level.
Although Governor Douglas refused to sign the new state credit card law, he did not veto it thereby allowing it to become law. The new law will allow retailers to set minimum dollar amounts if the customer desires to use selected cards. It also opens the door on retailers offering discounts to customers who choose to use cash or other forms of less expensive payment options. The law shares a similarity to the new law passed by Congress this week which places tougher guidelines on banks and credit card companies in regard to debit card usage that allows retailers to offer discounts to individuals who choose to use cash, checks and debit cards.
Mallory Duncan, Senior Vice President and General Counsel for The National Retail Federation (NRF), noted how important the new credit card law is saying Vermont is the first state to take action to protect retailers and consumers alike. The new law also takes into consideration contract rules set by Visa and MasterCard which prohibits retailers from setting minimum payment amounts. Retailers have said that premium cards which provide cardholders with greater rewards cost the retailer more in payment processing fees. With the new law, retailers will have the power to turn such cards away.