PIERRE, John Hult/South Dakota Searchlight — A returned check written to a South Dakota business could soon cost its account owner $20 more.
Senate Bill 38 would update the fee businesses can charge people for a bad check from $40 to $60. It would be the first increase since 2007.
The bill passed the Senate unanimously on Jan. 12 and landed on the House of Representatives floor on Monday with a single “no” vote to its name. That vote came from Rep. Bill Shorma, R-Dakota Dunes, during the bill’s Jan. 24 appearance in the House Commerce and Energy Committee.
Shorma rose to oppose the fee hike again before the full House, and 15 other representatives joined him. The bill passed 50-16 and now awaits consideration by Gov. Kristi Noem.
The bill’s sponsor, Rep. Lynn Schneider, R-Huron, told his fellow lawmakers that the fee is necessary to help businesses cover the cost of processing the bad check.
No one should ever be hit with the fee, said Schneider, a retired banker.
“This is a fee that is totally avoidable,” he said.
But any business that might accept a bad check made the choice to accept checks, Shorma countered.
“The business is taking the risk when they accept checks,” Shorma said.
Schneider said the fee is likely still smaller than it ought to be, even with the increase.
“The actual cost that the merchant has to collect, this probably still won’t cover it,” Schneider said.