The Senate sponsors of a bill that sought to rein in “swipe fees” imposed by credit card companies on taxes and tips are postponing the measure until next session. The delay will give sponsors more time to communicate directly with stakeholders to ensure everybody’s on board.

House Bill 1282 — sponsored by Reps. William Lindstedt, D-Broomfield, and Max Brooks, R-Castle Rock and Sens. Barbara Kirkmeyer, R-Brighton, and Lindsey Daugherty, D-Arvada — would bar credit card networks from charging businesses for “swipe fees.” These fees, also known as interchange or transaction fees, cover expenses like fraud prevention, bad debt and rewards programs.

Swipe fees can account for about 2% to 4% of the total cost of a tab.

The bill had already passed through the House Finance Committee and the chamber floor on a 9-3 and 43-21 vote, respectively.

Lindstedt and Brooks told the Finance Committee last month that large federal banks like Chase and Wells Fargo were excluded from the bill to avoid potential lawsuits. A judge ordered an injunction on a similar law in Illinois, prohibiting the measure from being applied to federally chartered and out-of-state banks.

Brooks said he and his cosponsors met with the Attorney General’s Office, where they were told that the state would be in a “defensible legal position” should the bill become law and face legal challenges.

“We should do better than allowing people to profit on local and state sales tax,” Lindstedt said. “I think the largest financial institutions in the world will be OK if they don’t take 3% of waiters’ tips.”

Opponents of the bill argued it would make things more difficult for small businesses and consumers, not easier.

Most people have more than one credit or debit card, said Jennifer Wagner of GoWest Credit Union, and if they know they would be charged more for using their credit union or small bank-issued card than their big-name card, they would choose the latter.

Wagner said that while she does not believe the sponsors intended to target small banks and credit unions, the measure could seriously harm Colorado’s independent financial institutions.

While sponsors might have tried their best to craft the bill to avoid potential suits, Wagner said litigation is inevitable.

Rep. Sean Camacho, D-Denver, agreed and argued that passing a bill guaranteed to bring litigation when the state is already in so much debt is irresponsible.

“I’m not tone-deaf to the fact that there are restaurants and small businesses and workers in my community that are really hurting. I just don’t think this is the bill to fix it,” he said.

Not the end of our conversation

Before asking the Senate Judiciary Committee to postpone the bill on Monday indefinitely, Daugherty and Kirkmeyer made it clear that while 1282 will no longer exist, they were not finished with the policy at its heart.

“Every day, small businesses, including your favorite coffee shop down the street, the family-owned convenience store, the neighborhood restaurant you take friends and family to, are getting nickel and dimed by a system they have no control over,” said Daugherty. “This practice is fundamentally unfair. It’s predatory and it’s squeezing the very businesses in our districts that we were elected to support. Meanwhile, while small businesses are fighting to survive, trying to make rent, cover payroll and stay afloat, Visa and Mastercard are posting record-breaking profits, year after year.

By cracking down on these predatory fees, we can help reduce consumer costs and give small businesses the breathing room to stop baking these hidden costs into the price of goods and services.”

Kirkmeyer said these fees also impact nonprofit and charitable organizations.

“When someone makes a donation to a food pantry, a homeless shelter or a youth mentoring program, a piece of that generosity is siphoned away by credit card companies. Dollars that are meant to feed families, house veterans or support kids in need are instead going towards banks and multinational billion-dollar corporations.”

Kirkmeyer admitted the bill was “pretty complicated” and that sometimes policies take more than one session to pass.

“Our legislation is not moving forward, but we’re not necessarily walking away from this issue,” she said. “It would be a profound disservice to the people we represent. Light has been shed on the practice, and there’s no putting it back in the box. We have a duty to stand up, especially when it’s hurting our communities, even when it’s hard — especially when it’s hard, and especially when the path forward is not crystal clear. This is not the end of our conversation, it’s just the beginning, and we look forward to continuing the fight for fairness, transparency, and real relief for the people who make Colorado the state that we’re all proud to call home.”