SB 2056 adds Chapter 604B to the Texas Business & Commerce Code to regulate anti-competitive practices and improve transparency in the credit card transaction system. The bill primarily targets large financial institutions—specifically, credit card issuers with over $85 billion in global assets—and introduces new restrictions on how they set and apply transaction fees known as “swipe fees,” which include interchange and assessment fees paid by merchants for card processing.
The bill prohibits credit card issuers from engaging in collusive behavior, such as agreeing to fixed fee schedules with other issuers or payment card networks. It also forbids issuers from using fee schedules established by payment card networks unless those schedules are tailored to the individual issuer. Furthermore, SB 2056 restricts issuers from charging merchants or cardholders fees on disputed transactions unless a formal determination of fault has been made and communicated in writing.
Another key provision protects merchant pricing autonomy by prohibiting issuers from penalizing or restricting merchants who offer discounts for alternative payment methods like cash or debit cards. The bill also introduces mandatory disclosures of swipe fees to promote transparency and inform consumer and merchant decision-making. Enforcement provisions include civil penalties for violations, reinforcing compliance without establishing a new criminal offense structure.
Overall, SB 2056 seeks to create a fairer and more competitive credit card fee marketplace by limiting monopolistic behavior, protecting small business flexibility, and increasing transparency in financial transactions.
The Committee Substitute for SB2056 introduces a more narrowly focused version of the originally filed bill. While both versions aim to address anticompetitive practices and opacity in credit card transaction fees, the substitute significantly pares back the bill's regulatory reach. Most notably, it removes an entire subchapter that targeted payment card networks such as Visa and Mastercard. The original bill prohibited these networks from requiring merchants to accept all cards, charging fees without findings of fault in disputes, or colluding on fee structures. By eliminating these provisions, the substitute version confines its scope to regulating only the conduct of large credit card issuers.
Another key difference lies in the transparency and disclosure requirements. The original bill required both credit card issuers and payment card networks to provide detailed disclosures—cardholders would receive swipe fee breakdowns on their monthly statements, and merchants would receive itemized fee information for each transaction within 45 days. In contrast, the substitute retains only the cardholder-facing disclosure requirement and delays its implementation until March 1, 2026. The removal of the merchant disclosure requirement notably reduces the bill's immediate impact on business transparency.
The enforcement provisions also differ substantially. The original version included a comprehensive enforcement framework empowering the Texas Attorney General to investigate violations, seek tiered civil penalties of up to $30 million, and obtain injunctive relief. The substitute bill simplifies this to a general civil penalty provision, eliminating the detailed enforcement mechanism and the explicit restriction on private lawsuits. Additionally, the original bill included a clause preserving the validity of pre-existing contracts in the face of new regulatory prohibitions; this clause is absent in the substitute, which could mean the new rules may apply more broadly upon enactment.
In summary, the Committee Substitute for SB 2056 streamlines the original bill to focus more narrowly on large credit card issuers and consumer disclosures while removing provisions that regulated payment networks, mandated detailed enforcement tools, and acknowledged existing contractual obligations. These changes appear to be aimed at improving the bill's political feasibility and minimizing implementation complexity while still pursuing its central aim of discouraging collusion and promoting transparency in the credit card fee ecosystem.
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Sen. Kelly Hancock
