Concerning the imposition of fees by payment card networks.
SB26-134 would regulate how payment card networks calculate and impose interchange fees on debit and credit card transactions in Colorado. The bill generally prohibits a payment card network from charging a percentage-based interchange fee on the gross amount of a transaction if that amount includes sales, use, occupation, or excise taxes. In practice, the fee would have to be calculated on the nontax portion of the transaction, or the network would need to use one of several compliance methods, such as rebating the tax-related portion after settlement or allowing merchants to submit tax documentation later for a credit.
The bill also creates an exemption for certain smaller issuers, generally those that did not exceed $60 billion in consolidated worldwide banking and nonbanking assets in the prior calendar year, and for some cards branded with a qualifying in-state financial institution. For those exempted transactions, the bill limits payment card networks from denying access to processing systems or imposing upgrade-related penalties on the issuer or branded institution. It further authorizes merchants, consumers, or other injured persons to sue for violations and sets damages, attorney fees, and class-action remedies.
In addition to the fee restrictions, the bill includes a use-of-savings provision requiring large retail businesses with more than 500 employees statewide to apply any savings from the bill toward lower consumer prices or toward employee wages or benefits beginning in the 2026-27 fiscal year. The act would take effect January 1, 2028, and apply prospectively to conduct on or after that date.
The bill’s impact on state law would be to add a new section to the Colorado Revised Statutes governing payment card networks, interchange fee practices, and private enforcement rights. It would also create a new statutory obligation for certain large retailers to direct savings to consumers or workers, while preserving the Attorney General’s existing antitrust authority under Colorado law.
Overall sentiment appears to have been supportive of the bill’s consumer- and merchant-protection goals, as reflected by its sponsorship and advancement through committee, but the available record does not include detailed debate or vote counts. The bill was ultimately vetoed by the Governor, indicating executive-level opposition or concern despite legislative support. The main points of contention likely centered on the regulation of card-network fee structures, the operational burden on payment networks and issuers, and the bill’s broader economic effects on merchants, consumers, and financial institutions.
The bill would add section 5-2-215 to the Colorado Revised Statutes, regulating payment card networks’ interchange fee calculations for debit and credit card transactions. It would prohibit percentage-based interchange fees from being applied to the tax portion of a transaction, require compliance mechanisms for excluding taxes from fee calculations, create exemptions for certain smaller issuers, and authorize private civil actions with damages, fees, and injunctive relief. It also imposes a savings pass-through requirement on large retail businesses and preserves the Attorney General’s antitrust enforcement authority.
The available context suggests the bill was generally framed as a consumer and merchant protection measure aimed at limiting fee extraction on tax amounts in card transactions. There is no committee transcript or recorded vote detail in the provided materials, so the record does not show specific floor debate positions. The bill’s final gubernatorial veto indicates that, despite legislative sponsorship and committee movement, it faced enough opposition at the executive level to prevent enactment.
The likely points of contention are the bill’s restriction on interchange fees, which would affect payment card networks, issuers, processors, and financial institutions by changing how fees are calculated and settled. The exemption for smaller issuers and in-state branded cards may have been intended to reduce disruption, but it also creates a carveout that could be debated as either necessary or uneven. The private right of action, damages structure, and the requirement that large retailers use savings for lower prices or employee compensation are additional areas that could draw opposition from business and financial industry stakeholders.