Colorado: Prevent Credit Card Chaos
The Colorado General Assembly is considering legislation, SB 26-134, that could fundamentally change how credit and debit cards work today. Pushed by corporate mega-stores like Walmart and Target, the bill would inject confusion and chaos into everyday transactions for consumers, small businesses, and hometown financial institutions.
Why is SB 26-134 Bad Policy?
Cards May No Longer Work for Sales Tax
Because SB 26-134 would prohibit interchange on the sales tax portion of credit and debit card transactions, consumers could be forced to pay sales tax in cash — creating confusion at checkout and adding new accounting headaches for businesses.
Ends Universal Access to Credit Cards
Today, businesses of all sizes accept cards seamlessly because standardized default interchange rates keep the system simple and predictable. Without universal access, merchants would be forced to negotiate rates directly with hundreds of banks and credit unions worldwide — an unworkable system that would lead to lost sales and frustrated customers who won't know if their card works until it is rejected at the point of sale.
Colorado Lawmakers: Don't Ignore the Warning Signs
Hear from experts about the impact of SB 26-134.
“It’s really important for lawmakers to look under the rug on this to see how [the legislation] undermines workers, hurts small businesses, and upends security for all of us as consumers.”
“It will harm good union jobs in Colorado while delivering millions in additional profits to corporations like Walmart. ”
“Slashing funding for fraud protection when financial fraud is skyrocketing will harm every Coloradan that depends on safe debit and credit cards.”
“Interchange plays a vital role in keeping banking services safe, accessible and affordable for all Coloradans.”
“When interchange fees are reduced, the costs of the system don’t disappear; they shift to consumers, community banks, local businesses, and the workers and nonprofits who rely on fast, secure payment processing.”
“This piece of legislation will in fact have a negative impact on business and agriculture lending and the other ways community banks support their communities.”
“This bill will cause credit unions to face downstream impacts and cost shifts that larger institutions can absorb but smaller institutions cannot, leading to increased costs and lost services for the millions of Coloradans we serve.”
How Would SB 26-134 Hurt Colorado?
SB 26-134 would cause credit card chaos for consumers, small businesses, and local financial institutions. Here’s why:
SMALL BUSINESSES ARE HARMED
They could face increased costs and headaches while corporate mega-stores reap all the benefits.
PUTS HOMETOWN BANKS AND CREDIT UNIONS AT RISK
These vital financial institutions could face burdensome compliance requirements and excessive fees that threaten their viability.
INCONVENIENCES CONSUMERS
Because SB 26-134 prohibits interchange on taxes, consumers could be forced to pay the sales tax portion in cash, requiring two separate transactions for a single purchase.
THREATENS FRAUD PROTECTIONS
Eroding interchange state by state puts businesses and consumers at risk by jeopardizing funding for fraud prevention and cybersecurity investments that keep card payments secure.
REWARDS GO AWAY
Interchange funds popular credit card rewards programs that consumers depend on — including airline, hotel, and cash-back cards — and these programs are likely to disappear if interchange revenue is eroded state by state.
LEGAL UNCERTAINTY REMAINS
The state could have to use taxpayer money to defend this policy against legal challenges.
Resources
Leading Organizations in Colorado Oppose SB 26-134
Tell Lawmakers: Stop SB 26-134
Contact your local elected leaders today and let them know you oppose this harmful bill.
Paid for by the Electronic Payments Coalition www.electronicpaymentscoalition.org 1747 Pennsylvania Ave. Washington, DC 20006