State Sen. Jenny Oropeza wants to eliminate fees businesses tack onto debit-card transactions.
Many merchants add surcharges to every swipe, sometimes in hopes of recovering fees they must pay to banks as a condition of accepting the cards.
Oropeza, D-Long Beach, on Tuesday introduced Senate Bill 933, which would bar retailers from imposing the premiums.
"Right now, there is a protection against this type of arbitrary charge for the use of credit cards," Oropeza said. "All we want to do is extend this protection on the use of credit cards to debit cards."
Oropeza said she found it unconscionable retailers would tack on flat fees for products struggling families need, such as jugs of milk and other necessities, particularly in a dour economy.
"We don't want to have them incumbered by a fee that is fairly arbitrary," she said. "It's really a regressive kind of charge."
Oropeza cited another concern: A plan to place unemployment payments on debit cards.Deducting fees from those cards, she said, would nickel and dime those already struggling from a job loss.
Oropeza did not know the range of fees charged to debit-card users. Tuesday's Wall Street Journal reported that many businesses charge about 25 cents a transaction, rather than a percentage of a sale. Some businesses charge more, others less.
Debit card use is soaring. More than half of transactions nationwide are paid for with plastic, and since 2006 more than half of those transactions have involved ATM cards.
Merchants also pay fees for accepting credit cards but they cannot legally charge customers a premium on those fees under California state law.
Oropeza realizes that retailers will likely pass any fees they must pay banks or creditors onto consumers, but she would rather see costs reflected in prices, which are more transparent.
"If the market will bear a higher price, the retailers will increase their prices, and that's pretty straight forward, and the consumer knows what to expect," she said. "But if there are these hidden charges there's a real opportunity for a ripoff."
Oropeza's bill has the backing of the Consumers Union and Consumers Federation.
Representatives from the California Chamber of Commerce and the California Retailers Association, groups that advocate for businesses that would be affected by the bill, could not be reached for comment.
A date for the first policy hearing on Oropeza's measure has not yet been set.
