Colorado’s long‑running fight over credit‑card swipe fees entered its final round Tuesday, when lawmakers sent a proposal to Gov. Jared Polis and rival industry coalitions immediately launched competing campaigns to sway his decision.

The clash pits groups urging Polis to sign the bill — restaurants, hotels, breweries, liquor stores, small businesses, and big‑box retailers — against the financial industry players pushing for a veto. The latter include banks, credit unions, credit‑card companies, and airlines, which argue the measure would wipe out credit‑card rewards programs that consumers use to earn and redeem points for everyday purchases and travel.

The focus has shifted from the legislature to persuading the governor one way or the other. And while community groups and small businesses weighed in throughout the session, the loudest voices are now coming from Washington, D.C.

Also known as interchange fees, swipe fees refer to the 2% to 3% that credit card companies charge retailers every time a customer swipes a credit card to make a purchase.

Senate Bill 26-134 would prohibit credit card companies from charging businesses a transaction fee based on the amount of sales tax. That is, they may not include the sales tax portion of a transaction when calculating the percentage-based “swipe” fee.

In a statement Wednesday, the Colorado Restaurant Association, which is among the bill’s biggest supporters, called the bill’s passage a “huge victory for restaurants across the state.”

“And we now eagerly anticipate Governor Jared Polis signing the bill into law,” the group said.

The Senate amended the bill to require businesses that save on credit card swipe fees to pass those savings along to consumers or use them for employee pay and benefits.

The bill scraped through the Senate on May 1 by a single vote, 18–17, after sitting untouched for nearly two months following its March 4 introduction. Its path through the House was far smoother, helped along by heavyweight sponsorship from the House speaker and majority leader.

SB 134 had its first hearing on Monday and was on its way to the governor’s desk by Wednesday.

The 2026 effort is a slimmed-down version of a 2025 bill that failed in the state Senate.

That narrower scope was intentional, House Speaker Julie McCluskie, D-Dillon, told the House Finance Committee. It’s a matter of fairness, she said, adding retailers are being charged a swipe fee on sales taxes that they don’t get to keep.

She also pointed out that the bill would exempt every Colorado-chartered bank and credit union holding assets of less than $60 billion as of Feb. 1, 2026.

Colorado credit unions, despite the exemption, remained opposed to SB 134, citing worries that the exemption wouldn’t work.

Payment systems are not designed to carve out specific taxes or data layers from transactions. Creating that carve-out would result in costly changes to the point-of-sale systems, according to Katie March, representing the state’s credit unions.

No other state has implemented this kind of legislation, she said, adding an asset-cap exemption has never worked to hold small institutions harmless.

Credit union representatives also pointed to the Office of the Comptroller of the Currency, which issued rules on April 24 stating that all federally chartered banks would be preempted from complying with state-level interchange laws.

The ruling could subject Colorado to litigation from the federal government, they said.

A legal opinion from the National Restaurant Association argued that the interim final rules apply only to national banks in connection with the Illinois law that prompted them, and they do not extend to other parts of the payments system, such as payment card networks. Because those networks are not banks, the group’s opinion stated, the federal agency “has no authority to preempt non‑bank entities from state law.”

In the final weeks before the vote on the Colorado legislation, nearly 200 lobbying firms and individual lobbyists were brought in to work on the issue. With lawmakers giving the bill final approval on May 6, Polis now has 30 days to sign it, veto it or allow it to take effect without his signature. Until he decides, lobbying on both sides is expected to intensify.

Among the loudest voices is Airlines for America President and CEO Chris Sununu, who sent Polis a letter on Wednesday urging a veto. Sununu cited polling showing that 80% of Colorado consumers consider credit‑card bonus rewards an important benefit.

He warned that airline‑branded credit cards generated more than $1.2 billion in economic impact and supported nearly 10,000 Colorado jobs in 2024, arguing SB 134 would inject “unnecessary uncertainty” into the rewards system and threaten revenue and investment.

The Electronic Payments Coalition, which represents credit unions, community banks, and payment card networks, also called for a veto. EPC Executive Chairman Richard Hunt said lawmakers ignored warnings from tourism groups, community leaders, legal experts, and small businesses about the “credit card chaos” the bill could create, adding that only a veto would prevent confusion at checkout, costly legal battles, and harm to workers and businesses.

“The only way to prevent confusion at checkout, years of costly legal battles, and harm to Colorado workers and businesses is for Governor Polis to veto this legislation,” Hunt added.

Meanwhile, the Merchants Payment Coalition, a Washington, D.C.-based organization that represents the National Retail Federation, National Association of Convenience Stores, National Grocers Association, the Food Marketing Institute, and other merchant groups, is advocating for Polis to sign the bill.

“This is landmark legislation that will save Colorado small businesses and their customers millions of dollars each year and keep that money in the local economy rather than sending it off to out-of-state megabanks and global card networks,” the coalition’s Doug Kantor said.