A bill has been proposed in Vermont that would regulate the way credit card companies interact with retailers, prohibiting them from charging more for cards that offer special programs like reward miles. It would allow companies to offer discounts to consumers who use cards with lower fees, and to establish minimum and maximum purchases that they will accept, according to the Times Argus.
Current legislation requires retailers to accept particular cards at all their locations. The proposed bill would have left this decision up to the individual markets.
Disapproval from both political parties has caused the legislation to stall in the Senate, according to the report. Some lawmakers have criticized the reform for putting Vermont banks at a competitive disadvantage. It might also cause some retailers to drop mainstream cards that traditionally have higher processing fees or offer special rewards for their customers.
"I've heard from several banks, all of whom oppose this legislation," Senator Randy Brock said. "They are concerned that it will affect their ability to compete against the larger banking institutions."
Another provision in the bill establishes a prison term and fine for those caught using debit or credit card skimming devices. These electronic devices may be attached to an ATM, gas pump or other payment card processor. They will track the card's number as well as any other personal identification numbers input at the terminal and transmit them via bluetooth to a fraudster sitting nearby.
These numbers can then be used to commit identity theft by opening new credit cards or charging purchases to a victim's account. Fraudsters who get their hands on debit card information may use this to wipe out their victim's savings. The Vermont proposal would establish a criminal penalty of up to 10 years in prison and up to $10,000 in fines.
This provision has been received more warmly, according to the report.
"I'm not going to quote the vice-president of the United States, but this is a really big deal," Senator Richard Sears was quoted as saying.
Original sentiment among legislators indicated that the proposal would win quick approval. It has been pulled from the Senate floor, pending further consideration.