Banks Are Lying About HB25-1282 - Here’s What They Don’t Want You to Know

Lately, a wave of misinformation - driven by the banking lobby - has flooded inboxes and airwaves. Their goal? To sink a straightforward, commonsense bill: HB25-1282. Their ads claim the bill will hurt consumers, destabilize the payment system, and threaten access to credit. But here’s the truth: HB25-1282 simply prohibits credit card companies from charging swipe fees on sales tax and tips - money that doesn’t belong to the business in the first place.

Let’s be clear: this bill doesn’t eliminate interchange fees. It doesn’t prevent customers from using credit or debit cards. It doesn’t force small businesses to change how they operate. What it does is stop Visa, Mastercard, and other payment networks from taking a percentage cut of taxes and gratuities - charges that go to the government or workers, not to the business.

A quick clarification: if you’ve tipped a server with a credit card, the full tip still goes to the server. But the business pays a swipe fee on the entire amount - including the tip. So, while the server remains whole, the restaurant takes a hit on money it never keeps. It's the same with sales tax: when you buy something and pay tax, the credit card companies charge the merchant a fee on the total, including the tax. HB25-1282 stops that. That’s it.

Misinformation vs. Reality

The banking lobby is throwing out wild claims - none of them grounded in fact:

• “It will break the payment system.”
  Not true. Payment networks already process itemized sales tax through Level 2 and Level 3 data for corporate and government cards. The infrastructure exists. They just don’t want to apply it broadly because it would trim their profit margins.
  
  
• “It will destroy rewards programs.”
  They said the same thing after the Durbin Amendment. Banks adapted, and rewards continued. The real issue? These programs are funded by charging higher fees to merchants, which then raise prices for everyone - whether they use rewards or not.
  
  
• “It will create compliance nightmares.”
  Also false. The burden falls on card networks, not merchants. These networks already handle complex updates for fraud, security, and regulation. Excluding tax lines from swipe fee calculations is simple - this is about resistance, not technical challenge.
  
  
• “It hurts local governments.”
  Wrong again. Most governments already pass along card processing fees to consumers. This bill doesn’t change that - it just prevents banks from profiting off public revenue.

The Real Stakes

Swipe fees hit over $100 billion nationally last year - up nearly 50% since the pandemic. In Colorado alone, businesses lose around $207 million annually just from sales tax swipe fees. That’s not business overhead - that’s extraction.

Small businesses in Castle Rock, Douglas County, and across Colorado run on thin margins. They’re trying to keep their doors open, hire staff, and pay fair wages - while losing money on dollars they don’t even keep. HB25-1282 fixes this. And the banking lobby is fighting it because they know it chips away at an unearned profit stream.

Credit card companies profit when prices go up, when tips rise, and when taxes increase. That’s not value creation - it’s parasitic.

Why We Must Pass HB25-1282

This bill protects consumers by protecting the businesses they rely on. It doesn’t end rewards - it brings transparency. And it doesn’t disrupt the payment system - it just demands fair play.

HB25-1282 isn’t radical. It’s reasonable. It’s not anti-bank. It’s pro-small business.

The banking lobby opposes it because it reveals how little value they provide for the fees they charge. That’s why they’re spending so much to stop it. But the truth still matters - and so do the businesses that drive Colorado’s economy.

Let’s pass HB25-1282 and put an end to this needless siphoning of money from our communities.