Assemblymember Quirk Authors Bill to Stop the Poor from Subsidizing Credit Card Benefits to the Wealthy
Thursday, February 20, 2020
SACRAMENTO – Assemblymember Bill Quirk (D-Hayward) is taking action in addressing a major economic inequality occurring on a daily basis by putting an end to the poor subsidizing credit card benefits to the wealthy. AB 2695 eliminates the ban retailers have with regard to charging a surcharge on credit card transactions.
“My good credit has allowed me to qualify for credit cards that can earn me gas rewards, hotel stays and travel miles. However, consumers with poor credit or without access to credit are subsidizing this benefit for me and for millions of other Californians with access to good credit,” said Assemblymemebr Quirk.
The federal government prohibited retailers from adding on a credit card surcharge to customers until 1984. When the federal law expired, California and several other states adopted a credit card surcharge ban of their own. However, California law does allow retailers to offer customers cash discounts.
“I can’t recall the last time I went to a business and was offered a discount for paying in cash,” stated Assemblymember Quirk.
Retailers report that the processing fee they incur on an annual basis for credit card transactions exceed millions of dollars. “The reality is that retailers do not actually eat this cost in its entirety. They pass it on to customers by raising the overall price of their products and services. What this means, is that a customer who uses cash is paying for, and subsidizing, the benefits that customers with credit cards earn with each purchase. That is just not fair,” explained Assemblymember Quirk.
On January 3, 2018, in Italian Colors Restaurant v. Becerra, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit agreed with the plaintiffs in the case that California’s law on prohibiting credit card surcharges constituted a violation of their first amendment right. According to the ruling, all of the plaintiffs expressed an interested in posting a single sticker price and charging an extra fee for credit card use.
AB 2695 will be eligible to be heard in policy committee in March.