A bill to lift retraints on credit card late fees charged by California banks has stalled in the state Legislature.

The snag leaves in place, at least for now, court decisions that limit the fees to smaller amounts than allowed in many other states.

The bill, which had sailed through the banking committee of the Senate, was tabled indefinitely by the judiciary committee after bank lobbyists rejected a compromise proposed by the committee chairman.

'A Line in the Sand'

"We had a hearing and the bankers drew a line in the sand that said, 'No fee caps. We want deregulation. Nothing else will do,"' said Gene Wong, counsel to the committee.

The initial proposal would have allowed the state's banks to charge the same fees as any of the top 10 issuers in the nation. It is being pitched as a jobs bill by bankers, who threaten to take their operations out of the state.

The committee chairman, Democrat Bill Lockyer of Hayward, proposed establishing a range of fees, based on the actual cost to the bank of late payments.

California courts have ruled that modest late fees of $3 to $5 violate state law that says late fees must be based on the actual costs incurred by lenders.

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