The Colorado House of Representatives approved a bill banning the collecting of interchange fees on sales taxes..The bill, SB26-134, passed on a 45-19 vote. The legislation, which would apply to payment card networks and financial institutions with more than $60 billion in assets, needs to be signed into law by Democratic Gov. Jared Polis. He has not indicated whether he will sign or reject the bill. Retailers with at least 500 employees would be required to use the savings to cut prices or increase employee wages and benefits. Retail groups approve of the legislation. “SB 134 is a common-sense proposal that will eliminate credit card interchange — or swipe — fees on sales taxes, which will help save Colorado restaurants and retailers tens of thousands of dollars or more at a time when every penny counts,” according to the Colorado Restaurant Association. The bill was similar to the Illinois interchange legislation banning banks, payment networks and other financial institutions from charging or getting interchange fees on taxes or gratuity. Banking trade associations filed a lawsuit against the law, but most of it has been upheld.On May 8, Chicago-based U.S. Court of Appeals for the Seventh Circuit Court vacated a lower court ruling and remanded the lawsuit back to the U.S. District Court for the Northern District of Illinois. Action came after the Office of the Comptroller of the Currency issued an interim final order exempting national banks and federal thrifts from the Illinois interchange fee rule. “This development raises significant questions about the enforceability and long-term viability of bills like SB26-134 and further underscores the risk of prolonged litigation and uncertainty,” said Colorado Bankers Association President/CEO Jenifer Waller. “Enacting SB26-134 in light of the court’s decision would not be prudent,” she wrote on LinkedIn.
