Credit Card Reform May Relax Rules for Retailers

Specifically, the bill in the Senate is likely to contain regulations that would relax the regulations on retailers for charging to use credit and debit cards:

The law allows merchants to charge less for using cash, but card companies' contracts with retailers can make it difficult. Merchants say they're required to post two prices on every product if they want to charge more for credit card use, and that the credit card price be more prominent. Retailers can face penalties if they don't.

The legislation would allow discounts for debit cards and ban retaliation against retailers who charge less for transactions that don't involve credit cards. [merchants and credit-card costs]

"The extra charges the establishment has to pay for the use of a credit card are kind of hidden inflaters in the cost of the product," said Sen. Richard Durbin (D., Ill.), who is pushing the measure with Sen. Christopher Bond (R., Mo.).

Needless to say, the banks and other credit card issuers are aggressively lobbying against this.