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Committee pauses S.135 over court suit, asks attorney general to brief on interchange-fee jurisdiction
Summary
Lawmakers in the Senate finance committee debated S.135, a bill addressing interchange/merchant fees and a cash acceptance provision, and decided to pause consideration pending guidance from the attorney general because of ongoing litigation over state jurisdiction.
The Senate Committee on Finance paused consideration of S.135 on jurisdictional and litigation grounds and asked the attorney general to brief the panel before the bill proceeds.
Committee members said they had received testimony offers from bankers and merchant groups about a provision that would allow merchants to charge or handle up to $500 in cash and discussed a provision tied to a $1.35 item in the draft text. "If we want to go forward both I would not want to go forward until the courts decide that we do have jurisdiction in this interchange fee," the committee chair said during the meeting.
Members described split views among colleagues and stakeholders. Several committee members said an Illinois court case — and related litigation in other states — raised uncertainty about whether the state can regulate interchange fees. One member said the prospect of litigation made pursuing the measure now a poor use of committee resources. "It's not worth spending our money to join the litigation on, on causes like this," one senator said.
Several senators said they were willing to "learn more" but did not express firm support to move the bill now; others emphasized higher-priority work for their constituents, including education finance. The chair said the committee would invite the attorney general to comment on S.135 and, depending on that input, would invite bankers, restaurant association representatives and other stakeholders back to the committee record.
No formal motion to amend or advance S.135 was taken at the meeting. Committee members directed staff to schedule the attorney general to testify and to hold further stakeholder testimony only after the committee hears from the attorney general about the legal risk and the effect of ongoing litigation.
The committee noted the practical options already available to merchants, such as offering discounts for non-card payments, and heard a stakeholder view that interchange fees also compensate for services merchants accept when card processors assume risk and handling costs.
The committee left open whether it will pursue fee changes after receiving the attorney general's briefing and further input from bankers and merchant groups.
