Is Mobile's New Surcharge Legal?

The legality of a new surcharge passed by the city of Mobile on credit card customers is being called into question.

The new surcharge will tack on an extra 3% for customers that charge.

But some people are asking whether or not that violates merchant agreements between business and credit card companies.

But city officials say there is a special state provision that allowed them to pass the surcharge. Earlier this week they adopted a resolution to allow the surchage.

"We got an agreement with the credit card companies to agree on an amount so we charge and get our part of it back. We can't collect license and taxes without getting the entire amount," said Mobile Finance Director Barbara Malkove.

The city says legally they cannot take in the surcharge fees as revenue. They can only charge enough to cover their cost to the credit card companies.