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MONTPELIER, Vt. -- Last Friday, Vermont became the first state to pass legislation limiting the swipe fees on credit and debit card purchases. This came one week after the Senate approved a similar provision as part of the financial overhaul bill, The Washington Post reported.
The new law, which will take effect Jan. 1, allows retailers in the state to set a $10 minimum for credit and debit purchases, as well as offer a discount to shopper who pay with cash.
While Vermont lawmakers unanimously passed the legislation several weeks ago, last Friday, Gov. Jim Douglas (D) said he would not sign the bill, but also would not veto it, which allowed it to become law without his signature, according to The Washington Post.
In a statement, Douglas said he sympathized with merchants, who have complained the swipe fee can often eat up their profit on small purchases, but worried consumers' ability to use their cards would be restricted, and that some card issuers and networks might limit their services in the state as a result of the new law, The Post reported.
"I do not believe … that legislation of this nature is best handled at the state level," Douglas said in the report.
Card issuers and processors said the Vermont law might help retailers, but could become a burden for consumers, and Trish Wexler, a spokeswoman for the Electronic Payments Coalition, which represents card issuers and processors, said many state benefits, such as unemployment checks, are delivered on prepaid cards, according to the report. If retailers set minimums it could force consumers to spend more money to meet the limit.
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