HOUSE DOCKET, NO. 1490        FILED ON: 1/20/2011

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1034

The Commonwealth of Massachusetts

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PRESENTED BY:

Steven M. Walsh

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to the prevention of credit card company unfair business practices.

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PETITION OF:

HOUSE DOCKET, NO. 1490        FILED ON: 1/20/2011

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1034

The Commonwealth of Massachusetts

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In the Year Two Thousand Eleven

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An Act relative to the prevention of credit card company unfair business practices.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1.  Section 1 of Chapter 140D of the General Laws, as appearing in the 2008 Official Edition,  is hereby amended by inserting before the definition of “Material Disclosure” the following definition: - 

“Electronic Payment Network” , an entity, other than  a national bank, that directly, or through licensed members, processors or agents, provides the proprietary services, infrastructure, and software that route information and data to facilitate transaction authorization, clearance, and settlement, and that merchants access in order to accept a brand of general-purpose credit cards, charge cards, debit cards or stored-value cards as payment for goods or services.

SECTION 2.  Said Chapter 140D is hereby further amended by inserting in Section 1 before the definition of “Open-end-credit plan” the following definition: - 

“Merchant”, a person or entity doing business in this state which offers goods or services for sale in this state.

SECTION 3.  Said Chapter 140D is hereby further amended by inserting after section 28B the following section: - 

Section 28C.  (a) An electronic payment network shall not, directly or through any agent, acquirer, processor or member of the system:  (i) impose any requirement, condition, penalty, or fine in a contract with a merchant relative to the display of pricing for goods or services for sale by the merchant; (ii) inhibit the ability of any merchant to offer its customers discounts or in-kind incentives for using a form of payment; (iii) inhibit the ability of any merchant to offer its customers discounts or in-kind incentives for using a debit or credit card of another electronic payment system; (iv) prevent any merchant from setting a minimum or maximum dollar value for its acceptance of a credit card; (v) inhibit the ability of any merchant to decide not to accept the products of an electronic payment system at one of its locations; (vi) prevent any merchant from deciding not to accept certain products of an electronic payment system based on the fees associated with such products while still accepting other products of that electronic payment system; or (vii) prevent any merchant from choosing how to route a transaction among any of the electronic payment networks authorized to clear transactions on the card in question.

(b) An electronic payment network shall not set required, suggested, or default rates for the fees to be charged by any issuer of its payment cards, agent, processor or member of the system for transactions occurring within this state unless such issuer, agent or processor is the electronic payment system itself and not a separate legal entity.

SECTION 4.  Said Chapter 140D is hereby further amended by inserting in section 32 the following paragraphs: -

(h) (1) Any electronic payment network that fails to comply with any requirement imposed under section 28C of this chapter shall reimburse all affected merchants for all chargebacks, fees, and fines collected from affected merchants directly or through any agent, processor or member of the system during the period of time in which the electronic payment system was in violation; (2) shall be liable for a civil penalty of $10,000 per chargeback, fee or fine levied in violation of said section; (3) any merchant whose rights under this section have been violated may maintain a civil action for damages or equitable relief; and (4) the attorney general may maintain a civil action for damages or equitable relief as provided for in this section to protect against violations of this chapter.