Patterson Credit Card Bill Lets Old Contracts Keep Dispute Fees

The text as introduced · 1,487 words

89R5341 SRA-D

By: Patterson
H.B. No. 4061

A BILL TO BE ENTITLED

AN ACT

relating to unlawful practices relating to credit card

transactions; providing a civil penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Title 12, Business & Commerce Code, is amended by

adding Chapter 604B to read as follows:

CHAPTER 604B. UNLAWFUL PRACTICES RELATING TO CREDIT CARD

TRANSACTIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 604B.001. DEFINITIONS. In this chapter:

(1) "Assessment fee" means a fee paid to the payment

card network for allowing a merchant to use a payment card or other

payment code or device in a credit card transaction.

(2) "Cardholder" means the person named on the face of

a credit card to whom or for whose benefit the credit card is

issued.

(3) "Credit card" means a card or device issued under

an agreement by which the credit card issuer gives to a cardholder

the right to obtain credit from the issuer or another person.

(4) "Credit card issuer" means a lender, including a

financial institution, or a merchant that receives applications and

issues credit cards to individuals.

(5) "Credit card transaction" means a transaction in

which a person uses a credit card or other payment code or device

issued or approved through a payment card network to use a line of

credit, whether authorization is based on a signature, personal

identification number, or other means.

(6) "Fee schedule" means any schedule, list, table,

chart, or similar document or agreement, whether or not publicly

disclosed, that sets forth or fixes the amount, or the formula for

determining the amount, of one or more fee rates.

(7) "Interchange fee" means a fee charged to a

merchant for the purpose of compensating the credit card issuer for

the issuer's involvement in a credit card transaction.

(8) "Merchant" means a person who accepts payment for

goods or services through a credit card transaction.

(9) "Payment card network" means an entity that

directly, or through a licensed member, processor, or agent,

provides the proprietary services, infrastructure, and software

that:

(A) route information and data to conduct a

credit card transaction authorization, clearance, and settlement;

and

(B) the entity uses to accept as a form of payment

a brand of credit card or other device that may be used to carry out

credit card transactions.

(10) "Swipe fee" means the interchange fee and, if

applicable, the assessment fee.

SUBCHAPTER B. CREDIT CARD ISSUERS

Sec. 604B.051. APPLICABILITY. This subchapter applies only

to a credit card issuer that, together with any affiliates, had

consolidated worldwide banking and nonbanking assets, including

affiliate assets, other than trust assets under management, of more

than $85 billion at any point during the previous calendar year.

Sec. 604B.052. PROHIBITED PRACTICES BY CREDIT CARD ISSUER.

A credit card issuer may not:

(1) fix or conspire to fix a swipe fee with, or on

behalf of, another credit card issuer or payment card network;

(2) receive or charge an interchange fee with respect

to a credit card transaction in an amount that is included on or

determined by a fee schedule that:

(A) has been fixed, established, or recommended

by a payment card network; or

(B) the credit card issuer knows, or reasonably

should know, is being used in the same calendar year by another

credit card issuer subject to this subchapter to determine the

amount of an interchange fee with respect to a credit card

transaction that issuer receives or charges;

(3) charge a cardholder or a merchant a fee due to a

disputed credit card transaction unless:

(A) a finding of fact concludes that the

cardholder or merchant is responsible for the disputed transaction;

and

(B) the cardholder or merchant is provided

written notification of the finding of fact; or

(4) prohibit or penalize a merchant that offers a

cardholder a discount for using cash, a debit card, or a gift card

instead of a credit card for payment.

Sec. 604B.053. REQUIRED DISCLOSURE OF SWIPE FEES TO

CARDHOLDERS. A credit card issuer shall disclose in a clear and

conspicuous manner on a monthly statement sent to a cardholder that

has been issued a credit card by the credit card issuer:

(1) if one or more swipe fees have been charged to the

cardholder on a credit card transaction; and

(2) the amount of the swipe fee charged to the

cardholder on a credit card transaction.

SUBCHAPTER C. PAYMENT CARD NETWORKS

Sec. 604B.101. PROHIBITED PRACTICES BY PAYMENT CARD

NETWORK. A payment card network may not:

(1) fix or conspire to fix a swipe fee with, or on

behalf of, another credit card issuer or payment card network;

(2) require a merchant to accept as payment any credit

card issued by the credit card issuer;

(3) charge a cardholder or a merchant a fee due to a

disputed credit card transaction unless:

(A) a finding of fact concludes that the

cardholder or merchant is responsible for the disputed credit card

transaction; and

(B) the cardholder or merchant is provided

written notification of the finding of fact; or

(4) prohibit or penalize a merchant that offers a

cardholder a discount for using cash, a debit card, or a gift card

instead of a credit card for payment.

Sec. 604B.102. DISCLOSURE BY PAYMENT CARD NETWORKS OF FEES

CHARGED TO MERCHANTS. A payment card network shall, not later than

the 45th day after the date of the credit card transaction, disclose

in a clear and conspicuous manner to the merchant or another person

who assists the merchant in processing credit card transactions and

who has been designated by the merchant to receive the disclosures,

the rate and total amount of each swipe fee or other fee charged on

each credit card transaction.

SUBCHAPTER D. ENFORCEMENT

Sec. 604B.151. INVESTIGATION BY ATTORNEY GENERAL. If the

attorney general is made aware or independently learns of a

violation of this chapter, the attorney general may investigate the

alleged violation to the same extent and in the same manner as an

alleged antitrust violation under Chapter 15.

Sec. 604B.152. CIVIL SUITS FOR ANTICOMPETITIVE VIOLATIONS.

The attorney general may file suit in district court in Travis

County or in any county in the State of Texas in which any of the

named defendants resides, does business, or maintains its principal

office on behalf of the State of Texas to collect a civil fine from

any person whom the attorney general believes has violated any of

the prohibitions in Section 604B.052(1) or (2) or Section

604B.101(1) or (2). An individual or other person adjudged to have

violated any of these prohibitions shall pay a fine to the state in

an amount not to exceed:

(1) if an individual, $300,000; or

(2) if any other person:

(A) $3 million, if the lesser of the person's

assets or market capitalization is less than $100 million;

(B) $20 million, if the lesser of the person's

assets or market capitalization is at least $100 million but less

than $500 million; or

(C) $30 million, if the lesser of the person's

assets or market capitalization is $500 million or more.

Sec. 604B.153. INJUNCTIVE RELIEF. The attorney general may

file suit against any person in district court in Travis County or

in any county in the State of Texas in which any of the named

defendants resides, does business, or maintains its principal

office on behalf of the State of Texas to enjoin temporarily or

permanently any activity or contemplated activity that violates or

threatens to violate any of the prohibitions in this chapter. In

any such suit, the court shall apply the same principles as those

generally applied by courts of equity in suits for injunctive

relief against threatened conduct that would cause injury to

business or property. In any such suit in which the state

substantially prevails on the merits, the state shall be entitled

to recover the cost of suit.

Sec. 604B.154. TRANSFER OF SUIT. No suit filed under this

subchapter may be transferred to another county except on order of

the court.

Sec. 604B.155. AUTHORITY OF ATTORNEY GENERAL NOT LIMITED.

Nothing in this subchapter shall be construed to limit the

constitutional or common law authority of the attorney general to

bring actions under state and federal law.

Sec. 604B.156. MUTUALLY EXCLUSIVE REMEDIES. Remedies

available under Sections 604B.152 and 15.20(a) are mutually

exclusive.

Sec. 604B.157. NO PRIVATE CAUSE OF ACTION. This chapter

does not create a private cause of action.

SECTION 2. To the extent of a conflict between Section

604B.052(3) or (4) or Section 604B.101(3) or (4), Business &

Commerce Code, as added by this Act, and a provision of a contract

entered into before the effective date of this Act, the contract

provision prevails.

SECTION 3. Notwithstanding Section 604B.053, Business &

Commerce Code, as added by this Act, a credit card issuer is not

required to comply with that section until March 1, 2026.

SECTION 4. This Act takes effect September 1, 2025.