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Senate advances bill to raise merchant fee cap for dishonored checks to $25
Summary
Senate Bill 180, which would raise the statutory cap on merchant fees for dishonored checks from $15 to $25, advanced to the third-reading calendar after floor debate about whether banks would pass higher fees on to consumers; the Senate reported a vote placing the bill on third reading.
The Utah State Senate advanced Senate Bill 180 on Feb. 26, 1997, a measure sponsored by Sen. Holmgren to increase the maximum merchant fee for dishonored checks from $15 to $25. Holmgren said the existing $15 cap "is not sufficient to really be able to get the check collected" and argued a $25 cap would allow merchants to contract for collectors rather than incur legal fees that can cost "60 to $90."
Opponents warned the change could result in higher overall costs to consumers if banks respond by increasing their own returned‑check fees. One senator described a scenario where a customer could end up paying "$50 on a $10 check" and urged lawmakers to consider targeting habitual bad-check offenders instead of broadly raising the cap.
Holmgren characterized the bill as a merchant bill, saying banks’ internal fee policies vary and that representatives of the banking industry had expressed support; floor remarks noted that "Larry Alder ... spoke in favor of the bill." Supporters said the increase would particularly help small merchants who struggle to recoup collection costs.
Under suspension of the rules, the Senate voted to read SB 180 for the third time and reported the result as 17 ayes, 9 nays, and 3 absent; the bill was placed at the bottom of the third‑reading calendar for future consideration.
Next steps: the bill remains on the Senate calendar for third-reading consideration; no third-reading final passage is recorded in this day's transcript.
