The California State Senate passed a bill which will prevent retailers from applying fees to debit and prepaid card transactions, while it is still awaiting action from the State Assembly. Groups such as the Consumers Union, Visa, AARP, and chambers of commerce are all sponsors of the bill. Sen. Jenny Oropeza author of the bill says that debit cards are already used to pay Social Security, veterans' benefits, and child support payments, and they will soon be used to pay disability payments and unemployment insurance.
Visa's Paul Russinoff says the bill expands "existing consumer protections for credit card use to debit cards." He says that surcharges undermine the electronic payments process and are unfair to low-income consumers. Advocates of the bill claim it closes a loophole in state law that allows merchants to apply surcharges on debit and prepaid card transactions. Many critics question whether it really protects the credit card companies at the expense of the small retailers and the cash carrying public.
Loretta Hunnicutt
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