A proposed state law to bar stores and other retailers from charging fees for the use of debit cards has been vetoed by Gov. Arnold Schwarzenegger.
State law already prohibits fees on the use of credit cards, and Senate Bill 933 proposed to place the same condition on debit cards -- often called ATM cards -- and on prepaid cards.
Schwarzenegger, in his veto message, suggested that SB 933 simply would prod retailers to raise prices to compensate for any loss.
"Instead of charging a customer who chooses to use a debit card, businesses would be forced to increase their prices to all customers, regardless of payment type," Schwarzenegger said.
Opponents of SB 933 had argued that SB 933 could be harmful to small businesses by eliminating the fee on shoppers but continuing to allow the issuers of ATM cards, such as VISA, to charge retailers when customers use them.
Retailers would be forced to absorb the loss themselves, reject use of ATM cards or find some way to compensate, such as raising prices or requiring purchase of a minimum amount of goods, such as $10, before accepting a debit card.
"The burden of paying these surcharges should fall on those who use debit cards and not those who choose to pay with another form of payment," Schwarzenegger wrote in his veto message.
SB 933 was proposed by Sen. Jenny Oropeza, D-Long Beach. The Legislature passed the measure largely along party lines, with most Democrats supporting it and most Republicans opposed.
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