FOR IMMEDIATE RELEASE
Contact: J. Craig Shearman
(202) 257-3678 craig@shearmancommunications.com
WASHINGTON, June 4, 2026 — The Merchants Payments Coalition expressed deep disappointment today after Colorado Gov. Jared Polis vetoed legislation that would have banned credit and debit card swipe fees on sales tax and was poised to deliver significant savings for small businesses and consumers across the state.
“It is unfortunate to see the will of the people of Colorado blocked at the finish line when affordability is a key issue for people,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said. “Colorado legislators stood up for small businesses and consumers, but this veto leaves them stuck paying inflated, price‑fixed swipe fees not just on their purchases but on top of sales taxes, too. Coloradans deserved relief, and this decision denies them more than $200 million a year in lower prices. Eventually, common sense reform of credit card swipe fees will win out over Wall Street misinformation and scare tactics.”
Polis on Wednesday vetoed the Swipe Fee Fairness and Consumer Safeguards Act, which would have banned ban swipe fees on the sales tax portion of transactions. The measure won final passage in the state legislature early last month but the card industry continued to lobby heavily to keep it from becoming law. Banks made a variety of false claims even though current card processing systems can do what is needed to comply with the law.
Swipe fees on sales tax currently cost Colorado merchants and their customers $217.5 million a year.
The legislation would have made Colorado the second state in the nation to limit swipe fees, following an Illinois ban on swipe fees on sales tax and workers’ tips passed in 2024. The Illinois law was set to take effect July 1 but was delayed one year by the state legislature this week bank lobbying and litigation and was then blocked a day later by a federal judge.
The Illinois Interchange Fee Prohibition Act was challenged by banks shortly after it was passed, but the measure was upheld in February by U.S. District Judge Virginia Kendall, who rejected their claim that it was preempted by federal banking law. Kendall said the law is not preempted because swipe fees are set by Visa and Mastercard, which are not banks and therefore not subject to the National Bank Act. Banks appealed the ruling to the 7th U.S. Circuit Court of Appeals, which sent the case back to Kendall last month after the Office of the Comptroller of the Currency nonetheless issued a rule contending that the National Bank Act preempts the Illinois law and similar measures from applying to nationally chartered banks.
Kendall this week issued a new order blocking the law and citing the OCC rule. But that decision was based on a technicality because the OCC was not a party to the case and a lawsuit challenging the rule has yet to be filed. Once that happens, the Illinois law is expected to once again be upheld and take effect.
The Colorado bill was written to regulate card networks such as Visa and Mastercard rather than banks. Sponsors took that approach because blocking card networks from applying swipe fees to sales tax should have kept financial institutions from collecting the fees regardless of federal banking law or the OCC rule.
The state action comes as Congress is considering the Credit Card Competition Act to address the fees. President Donald Trump endorsed the CCCA in January, saying it is needed “to stop the out of control Swipe Fee ripoff.”
Credit and debit card swipe fees have increased 80% since the pandemic, reaching a record $198.25 billion last year, including $4.5 billion in Colorado alone. They are most merchants’ highest operating cost after labor and are too much to absorb, driving up prices by more than $1,200 a year for the average family.
Visa and Mastercard — which control 80% of the market — each centrally set the swipe fees charged by banks that issue cards under their brands, and also block transactions from being processed over other networks that could do the job with lower fees and better security. Under the CCCA, banks with at least $100 billion in assets would enable cards they issue to be processed over at least two unaffiliated networks — Visa or Mastercard plus a competitor like NYCE, Star or Shazam. The measure is expected to result in competition over fees, security and service that would save merchants and consumers $17 billion a year.
About MPC
The Merchants Payments Coalition represents retailers, supermarkets, convenience stores, gasoline stations, online merchants and others fighting for a more competitive and transparent card system that is fair to consumers and merchants. Follow MPC on Twitter, Facebook or LinkedIn for the latest on swipe fees.
