MONTPELIER, Vt. - The Vermont Committee on Commerce and Economic Development approved S. 138, which would give merchants a voice in how they accept various payment methods. The bill also prohibits credit card companies from getting involved with what conditions a retailer may want to set for accepting plastic payments. The Vermont bankers and credit union associations oppose the bill.

Last week, retailers testified before the committee about the legislation, which also would let them provide discounts to customers for cash or debit card payments.

"The card companies have a 'discrimination€™ rule," said Mallory Duncan, senior vice president and general counsel for the National Retail Federation, in the Credit Card Union Times. "It prohibits merchants from giving customers a discount if the customer uses cash, checks or a card with lower fees."

Duncan testified before the committee on behalf of the bill. "This is a remarkably anti-competitive rule. It€™s like Pepsi and Coca-Cola telling stores that they could be fined if they charged people less for other soft drinks. Its effect, of course, is to discourage the market from moving toward cheaper forms of payment. That€™s good news for credit card companies but bad news for retailers and their customers," he said.

The bill could pass the full House as soon as Friday.