Iowa: Prevent Credit Card Chaos
The Iowa General Assembly is considering legislation, HSB 324, that could fundamentally change how credit and debit cards work today. Pushed by corporate mega-stores, the bill would inject confusion and chaos into everyday transactions for consumers, small businesses, and hometown financial institutions.
This bill is modeled off an Illinois law that was negotiated as a back room deal with no public debate and would bring blue state-style chaos to Iowa’s Main Street businesses and economy. Iowa lawmakers should say no to HSB 324.
Why is HSB 324 Bad Policy?
Cards May No Longer Work for Sales Tax
Because HSB 324 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.
Main Street Pays the Price
Tipped workers and small businesses will become collateral damage for a rushed political mistake.
Iowa Politicians are Ignoring the Warning Signs
Hear from experts about the impact of HSB 324.
“While protecting consumers and supporting small businesses are pivotal goals, HSB 324 takes the wrong approach. It attempts to fix a system that is not broken. In doing so, it risks inflicting broad economic harm without delivering real benefits.”
“Interchange fees help fund zero-liability fraud protections for cardholders, as well as cybersecurity, chargeback dispute resolutions, and other valuable services exclusive to card payments. Capping interchange fee revenue could result in a loss of these benefits, in addition to higher annual fees and interest rates for consumers simply to maintain the network.”
“Iowa has long benefited from a stable, free-market approach to economic policy. HSB 324 moves in the opposite direction by introducing unneeded complexity, shifting costs, and risking unintended harm to small businesses and consumers.”
How Would HSB 324 Hurt Iowa?
HSB 324 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 HSB 324 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.
PRIVACY THREATENED
Complying with HSB 324 could require businesses to report additional information about customer’s private purchases.
LEGAL UNCERTAINTY REMAINS
The state could have to use taxpayer money to defend this policy against legal challenges.
Tell Lawmakers: Stop HSB 324
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