Contracts; convenience fees for payment by electronic means; revise provisions
Summary
House Bill 241 revises Georgia law governing convenience fees charged when a consumer pays by electronic means. The bill allows a lender or merchant to collect a nonrefundable convenience fee for credit card, debit card, electronic funds transfer, electronic check, or similar electronic payments, but only if the fee reflects the actual processing cost or, alternatively, the average actual cost for that payment type or up to $5.00, whichever is greater. The bill also requires that the fee be disclosed clearly before it is imposed, including the dollar amount, that it is nonrefundable, and that it applies to electronic payment methods.
The measure limits these rules to certain transactions, including loans under Title 7, installment loans, retail installment and home solicitation sales contracts, motor vehicle sales financing contracts, and insurance premium finance agreements. It further specifies that an authorized convenience fee is not to be treated as interest, a finance charge, a service charge, or similar charge under the cited statutes, and it preserves the existing law referenced in Code Section 7-4-18 from altering this section. In practical terms, the bill standardizes when and how businesses and lenders may pass along electronic payment processing costs to customers in these covered areas of commerce.
Impact
HB241 amends Code Section 13-1-15 in Georgia’s contract law title and affects lenders and merchants that accept electronic payments in the specified categories of consumer credit, retail sales financing, motor vehicle financing, and insurance premium finance. It clarifies that convenience fees are permitted within defined limits and are not to be recharacterized as interest or finance charges under the referenced statutes, which helps preserve the legal distinction between processing fees and credit-related charges. The bill also imposes disclosure requirements and requires an alternative no-fee payment option, thereby changing compliance obligations for covered businesses and protecting consumers from undisclosed electronic payment surcharges.
Sentiment
The bill appears to have broad support, as reflected in strong bipartisan passage in both chambers: 160-3 in the House and 53-3 in the Senate. The vote totals suggest the measure was generally viewed as a technical or consumer-payment clarification rather than a controversial policy change. No committee transcripts were provided, so there is no recorded floor or committee debate to indicate significant opposition beyond the small number of dissenting votes.
Contention
The main points of potential contention are the authorization of convenience fees and the cap structure, since consumers may object to added costs for using electronic payment methods while lenders and merchants may favor the ability to recover processing expenses. Another possible issue is the bill’s treatment of the fee as not constituting interest or a finance charge, which matters to consumer advocates and regulated industries because it affects how the charge is regulated and disclosed. The limited opposition in both chambers suggests these concerns did not rise to a major legislative dispute, but they are the most likely areas of disagreement.
In general provisions, further providing for definitions; and, in licensing of drivers, further providing for issuance and content of driver's license and for carrying and exhibiting driver's license on demand.
In general provisions, further providing for definitions; and, in licensing of drivers, further providing for issuance and content of driver's license and for carrying and exhibiting driver's license on demand.