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Department of professional and financial regulation
Bureau of Financial Institutions
36 state house station
(207) 624-8590 (FAX)
Lloyd P. LaFountain III
Bureau of consumer Credit Protection
35 state house station
(207) 582-7699 (FAX)
William N. Lund
July 12, 2011
Curtis Picard, Executive Director
Re: Joint Advisory Ruling of the Bureau of Financial Institutions and the Bureau of Consumer
Dear Mr. Picard:
have asked the Bureau of Financial Institutions and the Bureau of Consumer
Credit Protection to clarify
It is our view that neither Article 8 of the Maine Consumer Credit Code, nor the new Article 8-A, effective September 28, 2011, and found in Public Law 2011, chapter 427, limit a merchant’s ability to offer discounts to consumers to encourage them to use alternative forms of payment in lieu of debit or credit cards. Maine’s surcharge prohibition, found in 9-A M.R.S.A.§ 8-303(2), and in the new Article 8-A at 9-A M.R.S.A.§ 8-509(1), provides that a seller in a sales transaction may not impose a surcharge on a cardholder who elects to use a credit or debit card in lieu of payment by cash, check or similar means. A surcharge is an increase in the “regular” price to a card holder that is not imposed on a customer paying by cash or check. A discount, on the other hand, is a reduction made from the “regular” price and, by definition, does not result in a surcharge. See 9-A M.R.S.A. § 8-103 (1-A)(M), and the new Article 8-A, 9-A M.R.S.A. §8-509(1). Therefore, merchant discounts do not violate the prohibition on payment surcharges found in the Maine Consumer Credit Code.
Please note that section 1075(b) of the federal Dodd-Frank Act provides that if the discount is used to encourage payment by the use of a debit or credit card, the discount may not differentiate on the basis of the issuer or the payment card network. Further, under the federal law, any discount must be offered to all buyers and disclosed clearly and conspicuously.
Finally, to avoid confusing discounts with prohibited surcharges, merchants should clearly display the amount of the regular price and the amount of the discounted price.
Lloyd P. LaFountain III, Superintendent William N. Lund, Superintendent
Bureau of Financial Institutions Bureau of Consumer Credit Protection