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Bill to outlaw debit card fees passes Legislature

August 12, 2010 |  1:10 pm

A bill sent to Gov. Arnold Schwarzenegger would prohibit retailers, including service stations, from charging extra fees when customers use debit cards to make a purchase.

The measure by California state Sen. Jenny Oropeza (D-Long Beach) would close a legal loophole by extending a 1985 prohibition on retail credit card fees to the newer and now-ubiquitous debit cards.

The bill is needed because more people use debit cards than cash, credit cards or checks to pay for goods and services, Oropeza said, and extra fees make those purchases more expensive.

The legislation, SB 933, is supported by consumer advocates and labor organizations. It's opposed by grocers, restaurants, gas station operators and other retailers, who contend they are simply passing along fees that they must pay to bank and credit card administrators.

Gov. Schwarzenegger, who has 12 days to sign or veto the bill, has not taken a public position on the issue.

-- Marc Lifsher