Vermont Limits Swipe Fees Paid To Credit Card Issuers

Vermont becomes the first state to pass legislation governing swipe fees on card purchases.

May 25, 2010

MONTPELIER, VT - Vermont became the first state to pass legislation governing swipe fees on credit and debit card purchases, just a week after the U.S. Senate approved a similar provision as part of the financial overhaul bill, the Washington Post reports.

Beginning January 1, the Vermont law will allow retailers to set a $10 minimum for credit and debit card charges and to offer a discount for cash-paying customers

Vermont lawmakers passed the legislation several weeks ago and then sent it to Governor Jim Douglas for approval. Douglas declined to sign the bill but also would not veto it, allowing it to become law last Friday without his signature.

Douglas said that he sympathized with merchants but also worried that the card companies might restrict the use of consumers' cards in the state as a result of the new law.

"I do not believe ...that legislation of this nature is best handled at the state level," Douglas said.

However, the move was applauded by retailers. "What Vermont has done is a first step," said the National Retail Federation's General Counsel Mallory Duncan, who is also chairman of the Merchants Payments Coalition. "What the Senate has done is a more important step, but it's not been completed, yet."

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