Florida State Capitol Building (Source: Adobe Stock).
As the Florida legislative session drew to a close on Friday, credit union leaders in the state were anxiously awaiting the fate of what could have radically and negatively changed the interchange fee structure for credit unions.
The Senate Bill 564 and its companion House Bill 677 would have excluded sales tax and tips from interchange fees charged for electronic payment transactions. Therefore, it would have required credit unions and banks to "develop a new process to tabulate the local tax and state tax burden separately – at least doubling the number of transactions processed in Florida," according to a reading of the legislation by the nonprofit taxpayer advocacy group Americans for Tax Reform.
Fortunately, and not without an impressive effort by the League of Southeastern Credit Unions (LSCU) and numerous credit unions, the bill was defeated.
LSCU President Samantha Beeler said, "Working with Florida credit unions, we were proud to send more than 400 messages to members of the House and Senate explaining the negative implications of House Bill 677 and Senate Bill 564. While this legislation was sold as a cost-savings mechanism for businesses, the tax on small businesses would have been detrimental, leaving only big-box retailers to benefit from this regulation of interchange. With the Florida legislative session wrapping up last Friday, we were proud to defeat these onerous proposals. We are grateful to our members for their continued advocacy on the issue and appreciate the ear of the Florida Legislature, who ultimately sided with credit unions and consumers."

According to LSCU, the league and its partners ran digital ads across multiple platforms "underlining the detrimental impact of these proposals. These ads geofence the State Capitol, targeting legislators, staff, lobbyists, and more and direct viewers to CUNA's new Protect My Card landing page."
State lawmakers argued they introduced this legislation due to a lack of movement at the federal level. But, according to experts, the legislation was dangerously flawed from the beginning.
A statement by Americans for Tax Reform said, "Assume a large Florida retailer remitted $1 billion in sales tax last year. If this bill had been in effect last year, payment card networks would have been required by the government to rebate tens of millions of dollars back to the retailer to cover the sales tax and tips for the transactions. The bill effectively applies a redistribution of wealth from financial institutions and consumers to large retailers. This bill distorts the entire credit market and is the antithesis of free market policy."
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