[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2234 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2234

To amend the Electronic Fund Transfer Act to eliminate confusion about 
consumer liability for unauthorized transactions involving debit cards 
      that can be used like credit cards, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 23, 1997

  Mr. Schumer (for himself and Mr. Gonzalez) introduced the following 
  bill; which was referred to the Committee on Banking and Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
To amend the Electronic Fund Transfer Act to eliminate confusion about 
consumer liability for unauthorized transactions involving debit cards 
      that can be used like credit cards, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Dual-Use Debit Cardholder Protection 
Act of 1997''.

SEC. 2. CONSUMER LIABILITY FOR CERTAIN UNAUTHORIZED USES OF A DUAL-USE 
              DEBIT CARD.

    (a) In General.--Section 909 of the Electronic Fund Transfer Act 
(15 U.S.C. 1693g) is amended--
            (1) by redesignating subsections (d) and (e) as subsections 
        (f) and (g), respectively; and
            (2) by inserting after subsection (c) the following new 
        subsections:
    ``(d) Use of Card to Initiate Transactions Without a Code or Other 
Unique Identifier.--
            ``(1) In general.--If--
                    ``(A) an unauthorized electronic fund transfer is 
                initiated by the use of a card which has been issued to 
                a consumer as a means of access to the consumer's 
                account for the purpose of initiating an electronic 
                fund transfer; and
                    ``(B) the use of the card to initiate an electronic 
                fund transfer does not require the use of a code or 
                other unique identifier, such as a fingerprint or 
                retina scan,
        the liability of the consumer for such unauthorized transfer 
        shall be determined under section 133 of this Act as if the 
        electronic fund transfer were an extension of credit.
            ``(2) Signature not treated as unique identifier.--A 
        signature shall not be treated as a unique identifier for 
        purposes of this subsection.
    ``(e) Notice of Liability and Responsibility to Report Loss of 
Card, Code, or Other Means of Access.--No consumer shall be liable 
under this title for any unauthorized electronic fund transfer unless 
the consumer has received the notice required under section 905(a)(1), 
and any subsequent notice required under section 905(b) with regard to 
any change in the information which is the subject of the notice 
required under section 905(a)(1), in a timely manner.''.
    (b) Technical and Conforming Amendments.--
            (1) Section 905.--Section 905(a)(1) of the Electronic Fund 
        Transfer Act (15 U.S.C. 1693c(a)(1)) is amended to read as 
        follows:
            ``(1) the liability of the consumer for any unauthorized 
        electronic fund transfer and the importance of promptly 
        reporting any loss, theft, or unauthorized use of a card, code, 
        or other means of access for reducing the liability of the 
        consumer for any such unauthorized transfer;''.
            (2) Section 909.--Section 909(c) of the Electronic Fund 
        Transfer Act (15 U.S.C. 1693g(c)) is amended by striking ``in 
        accordance with this section'' and inserting ``in accordance 
        with section 133 of this Act''.

SEC. 3. VALIDATION REQUIREMENT FOR DUAL-USE DEBIT CARDS.

    (a) In General.--Section 911 of the Electronic Fund Transfer Act 
(15 U.S.C. 1693i) is amended--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by inserting after subsection (b) the following new 
        subsection:
    ``(c) Validation Requirement.--In the case of a card described in 
subsection (a) the use of which, to initiate any electronic fund 
transaction, does not require the use of a code or other unique 
identifier (such as a fingerprint or retina scan), such card may be 
distributed to a consumer only if the requirements of paragraphs (1), 
(2), (3), and (4) of subsection (b) are met.
    (b) Technical and Conforming Amendment.--Subsection (d) of section 
911 of the Electronic Fund Transfer Act (as so redesignated under 
subsection (a)(1) of this section) is amended by striking ``For the 
purpose of subsection (b)'' and inserting ``For the purposes of 
subsections (b) and (c)''.
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