Op-ed: Delaware legislators were right to reject interchange bill
Lawmakers in Delaware recently rejected a bill that would have upended the interchange system. In an op-ed that appeared in Delaware’s Bay to Bay News, DEXSTA Federal Credit Union President/CEO Jerry King stated that lawmakers deserved recognition for making this decision. As written, House Bill 315 would have prohibited the collection of credit card interchange fees from tipped workers’ wages.
“If the bill had passed, the result would not have been a better deal for workers or small businesses. It would have weakened the payment system they both depend on, would have shifted costs onto the local banks and credit unions that keep Delaware commerce moving and would have likely forced businesses to only accept cash tips,” wrote King, adding, “any proposal that changes how tips are processed should be examined carefully to ensure that it does not create new challenges for workers, businesses or customers who have come to rely on modern payment options.”
King notes that not only do interchange fees help cover cybersecurity, fraud, and other costs, it would be “complicated, expensive, and disruptive” to reprogram and recertify point of sale systems across the state.
“By rejecting HB 315, [lawmakers] preserved a system that works for workers, small businesses and consumers,” he wrote.
Delaware is the latest example in a list of states that have attempted interchange-related legislation. America’s Credit Unions and Leagues fought similar bills, with efforts that include challenging the Interchange Fee Prohibition Act with the Illinois Credit Union League, securing a veto in Colorado with the GoWest Credit Union Association, and testifying against a Massachusetts bill at the request of the Cooperative Credit Union Association.