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House rejects higher returned-check fee in SB 56 after debate over consumer impact
Summary
After extensive floor debate about the effect on low-income residents and merchants, the House voted down Senate Bill 56, which would have raised the returned-check service charge from $15 to $20; the bill failed 29–44.
The Utah House on Feb. 15 defeated Senate Bill 56, a proposal to raise the statutory service charge for dishonored checks. The bill, which a sponsor described as a modest increase designed to offset merchant losses, failed by a vote of 29–44.
Representative Oskarsson, the bill sponsor, explained the measure would raise the allowable service charge from $15 to $20 and argued the state absorbs significant daily losses from returned checks. "We're raising the service charge from 15 to $20," he said, noting some retailers cover large totals of returned checks.
Opponents focused on the impact on low-income households and the practicalities of check processing. Representative Bigelow described a case in which a student ultimately paid $45 because a returned check was processed more than once, saying, "In effect, he paid $45 for 1 dishonored instrument." Critics warned that many merchants re-present returned checks and the proposed increase could disproportionately affect those least able to pay.
A former attorney with experience in check collection explained that the $15 bank charge is set by contractual bank agreements and that the merchant's bad-check fee compensates collection work — but said increasing the merchant fee risks becoming a windfall. Supporters replied that inflation and industry practices justify the modest increase.
After debate and procedural handling (including a temporary circling while an amendment was located), the House held a final vote that rejected SB 56. The bill will be returned to the Senate.
