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Senate advances bill to raise maximum merchant fee for bounced checks from $15 to $20
Summary
Senate Bill 56 passed to the third‑reading calendar after debate. Sponsor David Bueller argued the change would help small merchants recover costs from dishonored checks; opponents warned banks might raise fees and low‑income customers could be disproportionately affected. Vote: 18 aye, 10 nay, 1 absent.
The Utah Senate voted to advance Senate Bill 56 to the third‑reading calendar, a measure that would raise the maximum merchant service charge for dishonored checks from $15 to $20.
Senator David Bueller explained the rationale with a merchant example: a $20 sale often leaves only about $4 margin for the merchant after wholesale costs; bank charges for returned checks (about $4.50 in his example) can quickly exceed a merchant's margin. "This all this bill does is allow the merchant to charge up to $20 rather than $15," Bueller said, adding that raising the cap is meant to help small businesses recover costs and deter careless check writing.
Opponents argued the change would disproportionately affect low‑income customers and could prompt banks to raise returned‑check fees for account holders. Senator Black, a former credit‑union chairman, said he could not support increasing the cap; Senator Wharton warned banks might mirror the legislature's increase and raise their own fees, increasing total penalties for consumers.
Procedural outcome: The motion "Shall Senate Bill 56 pass to the third reading calendar?" passed on a roll call. The clerk recorded 18 ayes, 10 nays and 1 absent; the bill was placed on the third‑reading calendar.
Context: Bueller said a similar measure passed the House in a prior session and that last year's proposal had sought a $25 cap in the House; the current $20 cap was presented as a compromise. Senators asked questions about whether bank charges vary by check size and whether raising the merchant cap could have unintended downstream effects. Bueller said bank fees are contractual between customer and bank and vary widely.
Next steps: Because SB56 advances to third reading, floor action and final passage (or further amendment) would be scheduled on a subsequent day. The recorded roll call result is in the floor transcript.
