Legislative Days 26-28: Interchange

SB 512 by Sen. Drew Echols, R-Gainesville, prohibits interchange fees from being assessed on the sales tax portion of credit and debit card transactions — a change CBA and other financial trade groups oppose.  CBA’s position remains that this issue should be resolved at the federal level. 

On Thursday, the Senate Finance Committee heard testimony on the bill.  No vote was taken. 

CBA’s Chief Operating Officer Lori Godfrey testified in opposition.  She noted that SB 512 would increase costs for consumers, create a logistical nightmare for small businesses, and threaten the stability of the local banks that fuel Georgia’s economy. 

CBA urged the committee to instead consider HB 439, which increases the vendor compensation that retailers received for the collection and remittance of state sales taxes.  It is also pending before the Senate Finance Committee. 

Click here to watch the committee hearing.  The portion relating to SB 512 starts at 40:13 and CBA’s testimony begins at 1:01. 

Interchange is a fee for a guaranteed service.  Part of that service is fraud protection.  If the bill passes, banks are being asked to provide the same fraud protection, the same immediate funding, and the same digital security for a portion of the transaction—the tax—completely for free.  No other industry is mandated by law to provide its core service at a loss.