Regulation

Credit Card E-Filing Fees Capped In California

The high fees charged by private firms that are hired by the courts to operate e-filing systems and that are often passed onto consumers who pay with a credit card have been capped by a bill approved by California Governor Jerry Brown on Sept. 22.

According to Courthouse News Service, a proposal was first put forward in February by a group of 18 attorney service or e-file service companies called the Coalition for Improving Court Access. The coalition was led by Sacramento lobbyist Mike Belote who negotiated with the Judicial Council and Assemblyman Mike Gatto to carry the bill.

To prevent overcharging for credit card servicing fees, Assembly Bill 2244 mandates that e-filing managers must provide other forms of payment and document any e-filing expenses.

According to the filing: “The bill would require an agent of the court to report its costs in providing for payment by credit or debit card, or electronic funds transfer, as specified and would require the agent to provide the Judicial Council, or its authorized representative, with access to examine the records and documents of the agency for purposes of verifying report accuracy and compliance with certain requirements.”

The bill was unanimously approved in August by the Assembly after being amended three times and is expected to regulate the transition of California courts to e-filing.

E-file managers have typically held lucrative million-dollar contracts with some of California’s largest courts. Texas-based Tyler Technologies has contracts with over 25 of California’s 58 superior courts, and it typically limits e-filers to pay with credit card only. Convenience fees charged by Tyler range from 2.75 percent to 3.5 percent on all credit payments, and the unchecked fees provide considerable profit.

There were 7.5 million cases filed in fiscal year 2013–2014 in California state courts, and there has been significant opportunity for e-file managers to charge exorbitant convenience fees in California.

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