Payment Card Networks' Fees
SB134 regulates how payment card networks calculate and charge interchange fees on debit and credit card transactions in Colorado. The bill prohibits payment card networks from charging percentage-based interchange fees on the full gross amount of a transaction when that amount includes sales, use, occupation, or excise taxes. Instead, networks must exclude tax amounts from the fee calculation or otherwise rebate the difference to merchants through specified compliance methods.
The bill also creates an exemption for certain smaller issuers and for cards used in “exempted transactions,” generally tied to issuers that did not exceed $60 billion in consolidated worldwide assets in the prior year. It bars payment card networks from denying transaction-processing access to those cards or imposing upgrade-related penalties on issuers or branded financial institutions for complying with the law. Enforcement is provided through private civil actions by merchants, consumers, or other injured persons, with actual damages, minimum statutory damages, possible treble damages for bad faith conduct, attorney fees, and class action remedies. The bill also preserves the Attorney General’s antitrust authority and requires large retail businesses with more than 500 employees statewide to use any savings to lower consumer prices or invest in wages or benefits.
The bill would amend Colorado law by adding a new section to Title 5 governing payment card networks and electronic payment transactions. It affects card networks, issuers, processors, merchants, and large retail businesses, and it is designed to change how interchange fees are assessed on taxable sales. The act is set to take effect January 1, 2028, and applies prospectively to conduct on or after that date.
The general sentiment reflected in the voting history appears mixed and closely divided, with several narrow votes in committee and on the floor. The bill advanced despite split votes, suggesting meaningful support but also substantial opposition. The final House vote was more favorable than the Senate’s earlier close votes, indicating the measure remained controversial but ultimately had enough backing to move forward.
The main points of contention likely center on whether the state should regulate private payment card fee structures, the compliance burden on payment networks and issuers, and the bill’s carveouts for smaller institutions. Another likely issue is the requirement that large retailers pass savings through to consumers or employees, which may be viewed as a policy mandate beyond fee regulation. The private right of action and damages provisions may also have drawn concern from opponents worried about litigation exposure and enforcement costs.
SB134 adds a new statutory framework in Colorado law restricting payment card networks from calculating interchange fees on the portion of a transaction attributable to taxes, unless the transaction falls within a defined exemption. It creates compliance options, enforcement remedies, exemptions for certain smaller issuers and branded cards, and a savings-pass-through requirement for large retail businesses. The bill would directly affect payment card networks, issuers, merchants, consumers, processors, and large retailers, and it preserves existing state antitrust enforcement authority.
The voting record suggests the bill was politically divided and somewhat contentious. It passed key stages by narrow margins in the Senate and with a more comfortable margin in the House, indicating that supporters were able to assemble enough votes but not broad consensus. The absence of committee transcript discussion limits insight into specific arguments, but the close votes point to significant debate over the bill’s policy and economic effects.
Likely areas of dispute include the bill’s regulation of interchange fees, the technical requirements for excluding taxes from fee calculations, and the potential operational burden on payment card networks and merchants. Opponents may also have objected to the private right of action, statutory damages, and treble-damages provisions, while supporters likely emphasized consumer savings and merchant relief. The exemption for smaller issuers and the mandate that large retailers use savings for lower prices or employee compensation may also have been contested as either necessary safeguards or overreach.