An Act relative to price-fixing prohibition and consumer transparency
Generates a plain-language summary of the bill text and history.
| Committee | Recommendation | Vote |
|---|---|---|
| J17 | Accompanied | — |
Definitions as used in this Act: a. "Acquirer bank" means a member of a payment card network that contracts with a merchant for the settlement of electronic payment transactions. An acquirer bank may contract directly with merchants or indirectly through a processor to process electronic payment transactions. b. "Authorization" means the process through which a merchant requests approval for an electronic payment transaction from the issuer. c. "Clearance" means the process of transmitting final transaction data from a merchant to an issuer for posting to the cardholder's account and the calculation of fees and charges, including interchange fees, that apply to the issuer and the merchant. d. “Consumer” means any person who has been issued a credit card or debit card or who purchases goods or services using an electronic payment transaction or another method of payment. e. "Covered credit card issuer" means a credit card issuer that, together with any affiliates, had consolidated worldwide banking and nonbanking assets, including assets of affiliates, other than trust assets under management, of more than $85,000,000,000 at any point during the previous calendar year. f. "Credit card" means a card, plate, coupon book, or other credit device existing for the purpose of obtaining money, property, labor, or services on credit. g. "Debit card" means a card or other payment code or device issued or approved for use through a payment card network to debit an asset account, regardless of the purpose for which the account is established, whether authorization is based on a signature, a personal identification number, or other means. h. "Debit card" includes a general use prepaid card, as defined in 15 U.S.C. 16931-1. "Debit card" does not include paper checks. i. "Electronic payment transaction" means a transaction in which a person uses a debit card, a credit card, or other payment code or device issued or approved through a payment card network to debit a deposit account or use a line of credit, whether authorization is based on a signature, a personal identification number, or other means. j. “Fee schedule” means any schedule, list, table, chart, or similar document or agreement, whether publicly disclosed or not, that sets forth or fixes the amount, or the formular for determining the amount, of one or more fee rates. k. "Gratuity" means a voluntary monetary contribution to an employee from a guest, patron, or customer in connection with services rendered. l. "Interchange fee" means a fee established, charged, or received by a payment card network for the purpose of compensating the issuer for its involvement in an electronic payment transaction. m. "Issuer" means a person issuing a debit card or credit card or the issuer's agent. n. "Merchant" means a person that accepts electronic payment transactions and collects and remits a tax. o. "Payment card network" means an entity that: 1. directly or through licensed members, processors, or agents, provides the proprietary services, infrastructure, and software to route information and data for the purpose of conducting electronic payment transaction authorization, clearance, and settlement; and 2. a merchant uses to accept as a form of payment a brand of debit card, credit card, or other device that may be used to carry out electronic payment transactions. p. "Person" means any individual, firm, public or private corporation, government, partnership, association, or any other organization or entity. q. "Processor" means an entity that facilitates, services, processes, or manages the debit or credit authorization, billing, transfer, payment procedures, or settlement with respect to any electronic payment transaction. r. "Settlement" means the process of transmitting sales information to the issuing bank for collection and reimbursement of funds to the merchant and calculating and reporting the net transaction amount to the issuer and merchant for an electronic payment transaction that is cleared. s. "Tax" means any use and occupation tax or excise tax imposed by the State or a unit of local government in the State. t. "Tax documentation" means documentation sufficient for the payment card network to determine the total amount of the electronic payment transaction and the tax or gratuity amount of the transaction. Tax documentation may be related to a single electronic payment transaction or multiple electronic payment transactions aggregated over a period of time. Examples of tax documentation include, but are not limited to, invoices, receipts, journals, ledgers, and tax returns filed with the Department of Revenue or local taxing authorities.
Prohibition on network interchange price-fixing on behalf of covered credit card issuers and other unfair credit card practices. a. It is unlawful for any payment card network to, directly or indirectly through any agent, processor, contract, requirement, condition, penalty, technological specification, inducement, or otherwise (1) fix or conspire to fix an interchange fee with, or on behalf of, another covered credit card issuer or payment card network; (2) require any person to accept as payment any credit card issued by a covered credit card issuer if such person accepts as payment other credit cards that are enabled for processing over such payment card network; (3) charge a consumer or a merchant a fee or assessment due to a disputed credit card transaction unless and until a finding of fact concludes that the consumer or merchant is responsible for the disputed transaction and the consumer or merchant is provided written notification of the finding of fact; or (4) impose a penalty on a merchant based upon the way that merchant lawfully sets prices for goods or services. b. It is unlawful for any covered credit card issuer to, directly or indirectly through any agent, processor, contract, requirement, condition, penalty, inducement, technological specification, or otherwise, 1. fix or conspire to fix an interchange fee with, or on behalf of, another covered credit card issuer or payment card network; 2. receive or charge any interchange fee with respect to a credit card transaction in an amount that is included on or determined by a fee schedule that: (i) has been fixed, established, or put forward by a payment card network; or (ii) the covered credit card issuer knows, or reasonably should know, is being used in the same calendar year by any other covered card issuer to determine the amount any interchange fee with respect to a credit card transaction that such other covered credit card issuer receives or charges; 3. On or after the date that is 180 days after the enactment of this Act, issue a monthly statement to a consumer who has been issued a credit card by the covered credit card issuer without disclosing in a clear and conspicuous manner for each credit card transaction listed in the monthly statement, (i) whether any interchange fees were charged on the credit card transaction; and (ii) the amount charged for each such interchange fee charged on each credit card transaction. (4) charge a consumer or a merchant any fee or assessment due to a disputed credit card transaction unless and until a finding of fact concludes that the consumer or merchant is responsible for the disputed transaction and the consumer or merchant is provided written notification of the finding of fact; or (5) prohibit or penalize a merchant based upon the way the merchant lawfully sets prices for goods or services.
Interchange fees on taxes and gratuities prohibited. a. An issuer, a payment card network, an acquirer bank, or a processor may not receive or charge a merchant any interchange fee on the tax amount or gratuity of an electronic payment transaction if the merchant informs the acquirer bank or its designee of the tax or gratuity amount as part of the authorization or settlement process for the electronic payment transaction. The merchant must transmit the tax or gratuity amount data as part of the authorization or settlement process to avoid being charged interchange fees on the tax or gratuity amount of an electronic payment transaction. b. A merchant that does not transmit the tax or gratuity amount data in accordance with this Section may submit documentation for the electronic payment transaction to the acquirer bank or its designee no later than 180 days after the date of the electronic payment transaction, and, within 30 days after the merchant submits the necessary documentation, the issuer must credit to the merchant the amount of interchange fees charged on the tax or gratuity amount of the electronic payment transaction. c. This Section does not create liability for a payment card network regarding the accuracy of the tax or gratuity data reported by the merchant. d. It shall be unlawful for an issuer, a payment card network, an acquirer bank, or a processor to alter or manipulate the computation and imposition of interchange fees by increasing the rate or amount of the fees applicable to or imposed upon the portion of a credit or debit card transaction not attributable to taxes or gratuities to circumvent the effect of this Section.
Penalties. a. The attorney general of the Commonwealth may file suit to seek injunctive relief and, if appropriate, to collect a civil penalty from any covered credit card issuer or payment card network whom the attorney general believes has violated any of the prohibitions in Section 3 of this Act. b. An issuer, a payment card network, an acquirer bank, a processor, or other designated entity that has received the tax or gratuity amount data and violates Section 4 is subject to a civil penalty of $1,000 per electronic payment transaction conducted in violation of this Act, and the issuer must refund the merchant the interchange fee calculated on the tax or gratuity amount relative to the electronic payment transaction. c. An entity, other than the merchant, involved in facilitating or processing an electronic payment transaction, including, but not limited to, an issuer, a payment card network, an acquirer bank, a processor, or other designated entity, may not distribute, exchange, transfer, disseminate, or use the electronic payment transaction data except to facilitate or process the electronic payment transaction; to monitor for, detect, or prevent fraud; to support loyalty, rewards or promotional offerings; to tailor products and services to serve customer needs; or as required by law. A violation of this subsection constitutes a violation of chapter 93A of the general laws.
Severability. If any of the provisions of this Act are held invalid, the remainder shall not be affected as a result; nor shall the application of the provision held invalid to persons or circumstances other than those as to which it is held invalid be affected as a result.
SECTION 1. Definitions as used in this Act: a. "Acquirer bank" means a member of a payment card network that contracts with a merchant for the settlement of electronic payment transactions. An acquirer bank may contract directly with merchants or indirectly through a processor to process electronic payment transactions. b. "Authorization" means the process through which a merchant requests approval for an electronic payment transaction from the issuer. c. "Clearance" means the process of transmitting final transaction data from a merchant to an issuer for posting to the cardholder's account and the calculation of fees and charges, including interchange fees, that apply to the issuer and the merchant. d. “Consumer” means any person who has been issued a credit card or debit card or who purchases goods or services using an electronic payment transaction or another method of payment. e. "Covered credit card issuer" means a credit card issuer that, together with any affiliates, had consolidated worldwide banking and nonbanking assets, including assets of affiliates, other than trust assets under management, of more than $85,000,000,000 at any point during the previous calendar year. f. "Credit card" means a card, plate, coupon book, or other credit device existing for the purpose of obtaining money, property, labor, or services on credit. g. "Debit card" means a card or other payment code or device issued or approved for use through a payment card network to debit an asset account, regardless of the purpose for which the account is established, whether authorization is based on a signature, a personal identification number, or other means. h. "Debit card" includes a general use prepaid card, as defined in 15 U.S.C. 16931-1. "Debit card" does not include paper checks. i. "Electronic payment transaction" means a transaction in which a person uses a debit card, a credit card, or other payment code or device issued or approved through a payment card network to debit a deposit account or use a line of credit, whether authorization is based on a signature, a personal identification number, or other means. j. “Fee schedule” means any schedule, list, table, chart, or similar document or agreement, whether publicly disclosed or not, that sets forth or fixes the amount, or the formular for determining the amount, of one or more fee rates. k. "Gratuity" means a voluntary monetary contribution to an employee from a guest, patron, or customer in connection with services rendered. l. "Interchange fee" means a fee established, charged, or received by a payment card network for the purpose of compensating the issuer for its involvement in an electronic payment transaction. m. "Issuer" means a person issuing a debit card or credit card or the issuer's agent. n. "Merchant" means a person that accepts electronic payment transactions and collects and remits a tax. o. "Payment card network" means an entity that: 1. directly or through licensed members, processors, or agents, provides the proprietary services, infrastructure, and software to route information and data for the purpose of conducting electronic payment transaction authorization, clearance, and settlement; and 2. a merchant uses to accept as a form of payment a brand of debit card, credit card, or other device that may be used to carry out electronic payment transactions. p. "Person" means any individual, firm, public or private corporation, government, partnership, association, or any other organization or entity. q. "Processor" means an entity that facilitates, services, processes, or manages the debit or credit authorization, billing, transfer, payment procedures, or settlement with respect to any electronic payment transaction. r. "Settlement" means the process of transmitting sales information to the issuing bank for collection and reimbursement of funds to the merchant and calculating and reporting the net transaction amount to the issuer and merchant for an electronic payment transaction that is cleared. s. "Tax" means any use and occupation tax or excise tax imposed by the State or a unit of local government in the State. t. "Tax documentation" means documentation sufficient for the payment card network to determine the total amount of the electronic payment transaction and the tax or gratuity amount of the transaction. Tax documentation may be related to a single electronic payment transaction or multiple electronic payment transactions aggregated over a period of time. Examples of tax documentation include, but are not limited to, invoices, receipts, journals, ledgers, and tax returns filed with the Department of Revenue or local taxing authorities. SECTION 2. Prohibition on network interchange price-fixing on behalf of covered credit card issuers and other unfair credit card practices. a. It is unlawful for any payment card network to, directly or indirectly through any agent, processor, contract, requirement, condition, penalty, technological specification, inducement, or otherwise (1) fix or conspire to fix an interchange fee with, or on behalf of, another covered credit card issuer or payment card network; (2) require any person to accept as payment any credit card issued by a covered credit card issuer if such person accepts as payment other credit cards that are enabled for processing over such payment card network; (3) charge a consumer or a merchant a fee or assessment due to a disputed credit card transaction unless and until a finding of fact concludes that the consumer or merchant is responsible for the disputed transaction and the consumer or merchant is provided written notification of the finding of fact; or (4) impose a penalty on a merchant based upon the way that merchant lawfully sets prices for goods or services. b. It is unlawful for any covered credit card issuer to, directly or indirectly through any agent, processor, contract, requirement, condition, penalty, inducement, technological specification, or otherwise, 1. fix or conspire to fix an interchange fee with, or on behalf of, another covered credit card issuer or payment card network; 2. receive or charge any interchange fee with respect to a credit card transaction in an amount that is included on or determined by a fee schedule that: (i) has been fixed, established, or put forward by a payment card network; or (ii) the covered credit card issuer knows, or reasonably should know, is being used in the same calendar year by any other covered card issuer to determine the amount any interchange fee with respect to a credit card transaction that such other covered credit card issuer receives or charges; 3. On or after the date that is 180 days after the enactment of this Act, issue a monthly statement to a consumer who has been issued a credit card by the covered credit card issuer without disclosing in a clear and conspicuous manner for each credit card transaction listed in the monthly statement, (i) whether any interchange fees were charged on the credit card transaction; and (ii) the amount charged for each such interchange fee charged on each credit card transaction. (4) charge a consumer or a merchant any fee or assessment due to a disputed credit card transaction unless and until a finding of fact concludes that the consumer or merchant is responsible for the disputed transaction and the consumer or merchant is provided written notification of the finding of fact; or (5) prohibit or penalize a merchant based upon the way the merchant lawfully sets prices for goods or services. SECTION 3. Interchange fees on taxes and gratuities prohibited. a. An issuer, a payment card network, an acquirer bank, or a processor may not receive or charge a merchant any interchange fee on the tax amount or gratuity of an electronic payment transaction if the merchant informs the acquirer bank or its designee of the tax or gratuity amount as part of the authorization or settlement process for the electronic payment transaction. The merchant must transmit the tax or gratuity amount data as part of the authorization or settlement process to avoid being charged interchange fees on the tax or gratuity amount of an electronic payment transaction. b. A merchant that does not transmit the tax or gratuity amount data in accordance with this Section may submit documentation for the electronic payment transaction to the acquirer bank or its designee no later than 180 days after the date of the electronic payment transaction, and, within 30 days after the merchant submits the necessary documentation, the issuer must credit to the merchant the amount of interchange fees charged on the tax or gratuity amount of the electronic payment transaction. c. This Section does not create liability for a payment card network regarding the accuracy of the tax or gratuity data reported by the merchant. d. It shall be unlawful for an issuer, a payment card network, an acquirer bank, or a processor to alter or manipulate the computation and imposition of interchange fees by increasing the rate or amount of the fees applicable to or imposed upon the portion of a credit or debit card transaction not attributable to taxes or gratuities to circumvent the effect of this Section. SECTION 4. Penalties. a. The attorney general of the Commonwealth may file suit to seek injunctive relief and, if appropriate, to collect a civil penalty from any covered credit card issuer or payment card network whom the attorney general believes has violated any of the prohibitions in Section 3 of this Act. b. An issuer, a payment card network, an acquirer bank, a processor, or other designated entity that has received the tax or gratuity amount data and violates Section 4 is subject to a civil penalty of $1,000 per electronic payment transaction conducted in violation of this Act, and the issuer must refund the merchant the interchange fee calculated on the tax or gratuity amount relative to the electronic payment transaction. c. An entity, other than the merchant, involved in facilitating or processing an electronic payment transaction, including, but not limited to, an issuer, a payment card network, an acquirer bank, a processor, or other designated entity, may not distribute, exchange, transfer, disseminate, or use the electronic payment transaction data except to facilitate or process the electronic payment transaction; to monitor for, detect, or prevent fraud; to support loyalty, rewards or promotional offerings; to tailor products and services to serve customer needs; or as required by law. A violation of this subsection constitutes a violation of chapter 93A of the general laws. SECTION 5. Severability. If any of the provisions of this Act are held invalid, the remainder shall not be affected as a result; nor shall the application of the provision held invalid to persons or circumstances other than those as to which it is held invalid be affected as a result.