98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB1829

 

Introduced 2/15/2013, by Sen. Emil Jones, III

 

SYNOPSIS AS INTRODUCED:
 
205 ILCS 616/10
205 ILCS 616/46 new

    Amends the Electronic Fund Transfer Act. Provides that a person who sells or issues general use reloadable cards shall disclose, prior to sale or issuance of the card, any fees imposed by the issuer. Provides certain requirements for the disclosures. Makes other changes. Effective January 1, 2014.


LRB098 09006 MGM 39141 b

 

 

A BILL FOR

 

SB1829LRB098 09006 MGM 39141 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Electronic Fund Transfer Act is amended by
5changing Section 10 and by adding Section 46 as follows:
 
6    (205 ILCS 616/10)
7    Sec. 10. Definitions. For purposes of this Act, the words
8and phrases defined in this Section shall have the meanings
9ascribed to them unless the context requires otherwise.
10Whenever the terms "network" and "switch" are used, they shall
11be deemed interchangeable unless, from the context and facts,
12the intention is plain to apply only to one type of entity.
13    "Access device" means a card, code, or other means of
14access to an account, or any combination thereof, that may be
15used by a customer to initiate an electronic fund transfer at a
16terminal.
17    "Account" means a demand deposit, savings deposit, share,
18member, or other customer asset account held by a financial
19institution.
20    An "affiliate" of, or a person "affiliated" with, a
21specified person, means a person that directly, or indirectly
22through one or more intermediaries, controls, is controlled by,
23or is under common control with, the person specified.

 

 

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1    "Commissioner" means the Secretary of Financial and
2Professional Regulation or a person authorized by the
3Secretary, the Division of Banking Act, or this Act to act in
4the Secretary's stead.
5    "Division" means the Division of Banking within the
6Department of Financial and Professional Regulation.
7    "Electronic fund transfer" means a transfer of funds, other
8than a transaction originated by check, draft, or similar paper
9instrument, that is initiated through a terminal for the
10purpose of ordering, instructing, or authorizing a financial
11institution to debit or credit an account.
12    "Financial institution" means a bank established under the
13laws of this or any other state or established under the laws
14of the United States, a savings and loan association or savings
15bank established under the laws of this or any other state or
16established under the laws of the United States, a credit union
17established under the laws of this or any other state or
18established under the laws of the United States, or a licensee
19under the Consumer Installment Loan Act or the Sales Finance
20Agency Act.
21    "General use reloadable card" means a card, code, or other
22access device that is:
23        (1) issued on a prepaid basis primarily for personal,
24    family, or household purposes to a consumer in a specified
25    amount in exchange for payment;
26        (2) issued under an agreement containing terms and

 

 

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1    conditions that permit funds to be added to the card, code,
2    or other device after the initial purchase or issuance,
3    including a temporary non-reloadable card issued solely in
4    connection with a general use reloadable card, code, or
5    other device;
6        (3) not marketed or labeled as a gift card or gift
7    certificate; and
8        (4) redeemable upon presentation at multiple,
9    unaffiliated merchants for goods or services, or usable at
10    automated teller machines.
11    "Interchange transaction" means an electronic fund
12transfer that results in exchange of data and settlement of
13funds between 2 or more unaffiliated financial institutions.
14    "Issuer" means a person that issues a general use
15reloadable card or that person's agent with respect to the
16card.
17    "Marketed or labeled as a gift card or gift certificate"
18means directly or indirectly offering, advertising, or
19otherwise suggesting the potential use of a card, code, or
20other device as a gift for another person.
21    "Network" means an electronic information communication
22and processing system that processes interchange transactions.
23    "Person" means a natural person, corporation, unit of
24government or governmental subdivision or agency, trust,
25estate, partnership, cooperative, or association.
26    "Seller of goods and services" means a business entity

 

 

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1other than a financial institution.
2    "Switch" means an electronic information and communication
3processing facility that processes interchange transactions on
4behalf of a network. This term does not include an electronic
5information and communication processing company (1) that is
6owned by a bank holding company or an affiliate of a bank
7holding company and used solely for transmissions among
8affiliates of the bank holding company or (2) to the extent
9that the facility, by virtue of a contractual relationship, is
10used solely for transmissions among affiliates of a bank
11holding company, regardless of whether the facility is an
12affiliate of the bank holding company or operates as a switch
13with respect to one or more networks under an independent
14contractual relationship.
15    "Terminal" means an electronic device through which a
16consumer may initiate an interchange transaction. This term
17does not include (1) a telephone, (2) an electronic device
18located in a personal residence, (3) a personal computer or
19other electronic device used primarily for personal, family, or
20household purposes, (4) an electronic device owned or operated
21by a seller of goods and services unless the device is
22connected either directly or indirectly to a financial
23institution and is operated in a manner that provides access to
24an account by means of a personal and confidential code or
25other security mechanism (other than signature), (5) an
26electronic device that is not accessible to persons other than

 

 

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1employees of a financial institution or affiliate of a
2financial institution, or (6) an electronic device that is
3established by a financial institution on a proprietary basis
4that is identified as such and that cannot be accessed by
5customers of other financial institutions. The Commissioner
6may issue a written rule that excludes additional electronic
7devices from the definition of the term "terminal".
8(Source: P.A. 96-1365, eff. 7-28-10.)
 
9    (205 ILCS 616/46 new)
10    Sec. 46. Disclosure requirements for general use
11reloadable cards.
12    (a) A person who sells or issues general use reloadable
13cards shall disclose, prior to sale or issuance of the card,
14any fees imposed by the issuer. The disclosures shall be in
15writing and may be provided in electronic form, subject to
16compliance with the consumer consent and other applicable
17provisions of the Electronic Signatures in Global and National
18Commerce Act (E–Sign Act) (15 U.S.C. 7001 et seq.). The
19disclosure may be made on or with other documents. For joint
20accounts, only one set of the required disclosures must be
21provided and may be given to any of the account holders.
22    (b) The disclosure required under subsection (a) of this
23Section shall provide information regarding fees charged under
24the following fee categories, as applicable:
25        (i) total cost of setup fees (activation and cost of

 

 

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1    card fees);
2        (ii) maintenance fees (service and inactivity fees);
3        (iii) fees to spend money (signature purchases, point
4    of sale transactions involving a personal identification
5    number, and bill pay fees);
6        (iv) fees to get money (cash advance, cash back at
7    merchant, international conversion, ATM balance inquiry,
8    and ATM withdrawal fees);
9        (v) fees to add money (reload and direct deposit fees);
10        (vi) fees to obtain information (audio response unit,
11    audio response unit opt-out to live operator, and audio
12    response unit balance inquiry fees); and
13        (vii) other related fees (such as cash out, negative
14    balance, replacement card, rush replacement card delivery,
15    reissuing an expired card, and denied transaction fees).
16    The disclosure must also indicate when third party fees may
17apply.
18    (c) Accurate disclosure of all applicable fees in
19substantially similar form to that provided in this Section
20shall constitute compliance with the disclosure requirements
21under subsection (a) of this Section. Categories for which no
22fee is charged may be indicated as "free" or may be omitted.
23    (d) The standard disclosure form shall be organized as
24follows:
25[Name of Card Issuer]
26[Name of Prepaid Card Product] Fee Summary

 

 

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1FEE CATEGORY FEE TYPEAMOUNT
2Total Cost Activation $.........................
3of Setup: Cost of Card $.........................
4Maintenance: Service $........per [time period]
5Inactivity $.........................
6
7
8per [time period] after [time period] of inactivity
9Spend Money: Signature Purchase $.........................
10PIN/POS $.........................
11Bill Pay $.........................
12Get Money: Cash Advance $.........................
13Cash Back
14at Merchant$.........................
15International
16 Conversion ... % of the transaction
17amount when a currency
18conversion occurs
19
20
21or .% of the transaction amount when a currency conversion does not occur
22ATM Balance Inquiry $.........................
23ATM Withdrawal $.........................
24Add Money: Reload $.........................
25Direct Deposit $.........................
26Information: Audio response

 

 

 

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1unit ("VRU")$.........................
2
3VRU Opt-Out to Live Operator $.........................
4VRU Balance Inquiry $.........................
5Other: Cash Out $.........................
6Negative Balance $.........................
7Replacement Card $.........................
8
9to replace a [lost, stolen, or damaged card]
10Rush Delivery $.........................
11Reissue Expired Card $.........................
12Denied Transaction $.........................
13*asterisk indicates that third party fees may apply
14[insert webpage address]
15Cardholder Customer Service: [insert phone number]
16    (e) A card, code, or other access device is not a general
17use reloadable card merely because the issuer or processor is
18technically able to add functionality that would otherwise
19enable the card, code, or other access device to be reloaded.
20    (f) Compliance with the federal Electronic Fund Transfer
21Act and any regulations issued under that Act regarding general
22use reloadable card disclosures shall constitute compliance
23with this Section.
 
24    Section 99. Effective date. This Act takes effect January
251, 2014.