Colorado lawmakers could eliminate credit card fees for restaurants; critics argue it's favoritism

Colorado state senators advanced a bill Monday that supporters say could help restaurants by eliminating certain credit card swipe fees.

The measure now heads to a final vote in the State Senate, but critics, including lawmakers, credit unions, and other groups, say the bill creates favoritism and could be costly to small businesses.

Swipe fees can account for 3% to 4% of each transaction, cutting into already thin margins for many restaurants.

In a recent survey of more than 100 members of the Colorado Restaurant Association, respondents said they could save money if a bill to eliminate swipe fees passes and redirect those funds to other needs.

"That's money that could go to bonuses for managers, overdue repairs, equipment upgrades, or new furniture — it could go back out into the local economy," said Nelson Harvey, co-owner of the James Beard Award-winning restaurant Annette in Aurora.

Some lawmakers oppose the bill, however, arguing it will create unequal treatment under state law.

"I object to this bill because it creates state policy that treats citizens, businesses and banks differently," said Republican state Sen. Lisa Frizell of Douglas County.

The bill exempts credit unions and would require larger businesses to use any savings from reduced fees to lower prices or increase wages.

The Electronic Payments Coalition, an advocacy group representing credit unions, community banks, and payment networks, opposed the bill on several grounds, saying the legislation is "backed by corporate mega-stores" and would "harm small businesses, local financial institutions, and Colorado consumers." Some banks and credit unions voiced their opposition, arguing it would make transactions less safe and fraud more likely.

"Slashing funding for fraud protection when financial fraud is skyrocketing will harm every Coloradan that depends on safe debit and credit cards," Meagan Barrett, president and CEO of the Northern Colorado Credit Union, said. "If lawmakers cut that funding, it will only accelerate the rise in costs and loss of security facing consumers every day. As local, not-for-profit financial co-ops, these cuts will add new costs and risks for the 2.8 million Coloradans that chose a credit union as their financial partner."

Denver NAACP President Reverend Tony Henderson and Colorado Black Women for Political Action President Bianka Emerson issued a joint statement opposing the legislation, saying it would harm locally-owned and smaller businesses.

"Through our advocacy work in communities across Colorado, we have seen firsthand how important it is to protect the tools that help families build stability," they wrote. "We cannot afford to pass policies that unintentionally widen economic disparities or make it harder for working families to get ahead."

The Colorado Restaurant Association said retailers in the state paid more than $200 million in swipe fees on sales taxes alone in 2024.

A similar bill was introduced last year, but failed.