Zaffirini Bill Caps Credit Card Swipe Fees At 1.25 Percent

The text as introduced · 1,116 words

90R519 PRL-D

By: Zaffirini
S.B. No. 50

A BILL TO BE ENTITLED

AN ACT

relating to prohibitions and requirements 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. CERTAIN PROHIBITIONS AND REQUIREMENTS RELATING TO

CREDIT CARD TRANSACTIONS

SUBCHAPTER A. GENERAL PROVISIONS

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

(1) "Cardholder" means the person to whom or for whose

benefit a credit card is issued.

(2) "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.

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

financial institution, that issues credit cards to cardholders.

(4) "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, a personal

identification number, or other means.

(5) "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.

(6) "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.

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

goods or services through a credit card transaction.

(8) "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) a merchant 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.

Sec. 604B.002. APPLICABILITY TO DEBIT CARD TRANSACTIONS.

This chapter does not apply to a debit card transaction.

SUBCHAPTER B. PAYMENT CARD NETWORKS

Sec. 604B.051. PROHIBITED PRACTICES BY PAYMENT CARD

NETWORK. A payment card network may not directly or indirectly:

(1) prohibit a merchant from or penalize a merchant

for offering a discount to a cardholder that uses cash, a debit

card, or other legal tender as payment instead of a credit card;

(2) charge a cardholder or merchant a fee for a

disputed credit card transaction unless:

(A) the payment card network, the credit card

issuer, or another appropriate person makes a finding of fact in

which the person 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 not later than the 45th

day after the date of the transaction; or

(3) fix, establish, or recommend a fee schedule that

the payment card network knows, or reasonably should know, will be

used by a credit card issuer to assess an interchange fee that

violates Section 604B.102.

Sec. 604B.052. REQUIRED NOTICE FOR CHANGE OF FEE RATES. (a)

A payment card network shall clearly and conspicuously publish a

notice of any change to the network's fee rates on the network's

Internet website and on the comptroller's Internet website. A

change to the payment card network's fee rates may not take effect

earlier than the 90th day after the date the notice is published in

accordance with this subsection.

(b) The comptroller shall establish and maintain a

mechanism by which a payment card network may publish notice under

this section on the comptroller's Internet website.

SUBCHAPTER C. CREDIT CARD ISSUERS

Sec. 604B.101. APPLICABILITY OF SUBCHAPTER. 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 $200 billion or more.

Sec. 604B.102. LIMITATION ON INTERCHANGE FEE. A credit

card issuer to which this subchapter applies may not directly or

indirectly assess or receive an interchange fee in an amount

greater than 1.25 percent of the transaction amount.

SUBCHAPTER D. ENFORCEMENT

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

attorney general becomes aware of an alleged 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 PENALTY. (a) A person who violates

this chapter is liable to this state for a civil penalty in an

amount not to exceed $30 million.

(b) 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 the

civil penalty.

Sec. 604B.153. INJUNCTIVE RELIEF. (a) 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 temporarily or permanently

enjoin any activity or contemplated activity that violates or

threatens to violate this chapter.

(b) The court shall apply the same principles generally

applied by courts of equity in suits for injunctive relief against

threatened conduct that would cause injury to business or property.

(c) If the state substantially prevails on the merits, the

state is entitled to recover the cost of suit.

Sec. 604B.154. TRANSFER OF SUIT. A suit filed under this

subchapter may not be transferred to another county unless the

court of original jurisdiction orders the transfer.

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

This subchapter may not be construed to limit the constitutional or

common law authority of the attorney general to bring an action

under state or federal law.

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

available under Sections 15.20(a) and 604B.152 for a violation

arising out of the same conduct are mutually exclusive.

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

does not create a private cause of action.

SECTION 2. Not later than December 31, 2027, the

comptroller of public accounts shall establish the mechanism

required by Section 604B.052(b), Business & Commerce Code, as added

by this Act.

SECTION 3. (a) Except as provided by Subsection (b) of this

section, this Act takes effect January 1, 2028.

(b) Section 2 of this Act takes effect September 1, 2027.