[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1154 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                S. 1154

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 9, 1997

   Mr. Reed introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To amend the Electronic Fund Transfer Act to clarify 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 (b) through (e) as 
        subsections (d) through (g), respectively;
            (2) in subsection (a)--
                    (A) by redesignating paragraphs (1) and (2) as 
                subparagraphs (A) and (B), respectively, and indenting 
                appropriately;
                    (B) by inserting ``Cards Necessitating Unique 
                Identifier.--
            ``(1) In general.--'' after ``(a)'';
                    (C) by striking ``other meana of access can be 
                identified as the person authorized to use it, such as 
                by signature, photograph,'' and inserting ``other means 
                of access can be identified as the person authorized to 
                use it by a unique identifier, such as a photograph, 
                retina scan,''; and
                    (D) by striking ``Notwithstanding the foregoing,'' 
                and inserting the following:
            ``(2) Notification.--Notwithstanding paragraph (1),'';
            (3) by inserting before subsection (d), as so designated by 
        this section, the following new subsections:
    ``(b) Cards Not Necessitating Unique Identifier.--A consumer shall 
be liable for an unauthorized electronic fund transfer only if--
            ``(1) the liability is not in excess of $50;
            ``(2) the unauthorized electronic fund transfer is 
        initiated by the use of a card that has been properly issued to 
        a consumer other than the person making the unauthorized 
        transfer as a means of access to the account of that consumer 
        for the purpose of initiating an electronic fund transfer;
            ``(3) the unauthorized electronic fund transfer occurs 
        before the card issuer has been notified that an unauthorized 
        use of the card has occurred or may occur as the result of 
        loss, theft, or otherwise; and
            ``(4) such unauthorized electronic fund transfer did not 
        require the use of a code or other unique identifier (other 
        than a signature), such as a photograph, fingerprint, or retina 
        scan.
    ``(c) 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 in a timely manner 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).''.
    (b) Conforming Amendment.--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 requirement for promptly 
        reporting any loss, theft, or unauthorized use of a card, code, 
        or other means of access in order to limit the liability of the 
        consumer for any such unauthorized transfer;''.

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.--No person may issue a card described 
in subsection (a), the use of which to initiate an electronic fund 
transfer does not require the use of a code or other unique identifier 
other than a signature (such as a fingerprint or retina scan), unless--
            ``(1) the requirements of paragraphs (1) through (4) of 
        subsection (b) are met; and
            ``(2) the issuer has provided to the consumer a clear and 
        conspicuous disclosure that use of the card may not require the 
        use of such code or other unique identifier.''.
    (b) Technical and Conforming Amendment.--Section 911(d) of the 
Electronic Fund Transfer Act (15 U.S.C. 1993i(d)) (as redesignated by 
subsection (a)(1) of this section) is amended by striking ``For the 
purpose of subsection (b)'' and inserting ``For purposes of subsections 
(b) and (c)''.
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