[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3978 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 3978

  To provide consumer protections for lost or stolen check cards and 
debit cards similar to those provided with respect to credit cards, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 28, 2006

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

_______________________________________________________________________

                                 A BILL


 
  To provide consumer protections for lost or stolen check cards and 
debit cards similar to those provided with respect to 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 ``Debit and Check Card Consumer 
Protection Act of 2006''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) debit and check card use has experienced double digit 
        growth for longer than a decade, and more than 80 percent of 
        American consumer households now posses a debit or check card;
            (2) between 2001 and 2003, consumers made 42,500,000,000 
        transactions with debit cards, eclipsing credit card 
        transactions by 2,300,000,000;
            (3) as of 2003, debit cards accounted for \1/3\ of all 
        purchases in stores;
            (4) in addition to the rise in debit and check card use, 
        debit and check card fraud increasingly challenges American 
        consumers;
            (5) in 2005, debit card and ATM fraud accounted for losses 
        of $2,750,000,000;
            (6) despite that growth, statutory debit and check card 
        consumer liability protections remain substandard, as compared 
        to credit cards;
            (7) the debit and check card industry has, in some 
        instances, instituted liability protections that often exceed 
        the requirements set forth under the provisions of law; and
            (8) the law should be changed to ensure a continued level 
        of liability protection.

SEC. 3. CAP ON DEBIT CARD LIABILITY.

    Section 909(a) of the Electronic Funds Transfer Act (15 U.S.C. 
1693g(a)) is amended--
            (1) by striking ``Notwithstanding the foregoing'' and all 
        that follows through ``whichever is less.''; and
            (2) by striking ``meana'' and inserting ``means''.

SEC. 4. DEBIT CARD ERROR RESOLUTION.

    Section 908(f) of the Electronic Funds Transfer Act (15 U.S.C. 
1693f(f)) is amended--
            (1) by redesignating paragraphs (6) and (7) as paragraphs 
        (7) and (8), respectively; and
            (2) by inserting after paragraph (5) the following:
            ``(6) a charge for goods or services not accepted by the 
        consumer or the designee thereof, or not delivered to the 
        consumer or the designee thereof, in accordance with the 
        agreement made at the time of a transaction;''.

SEC. 5. CONSUMER RIGHTS.

    Section 908 of the Electronic Funds Transfer Act (15 U.S.C. 1693f) 
is amended by adding at the end the following:
    ``(g) Rights of Consumers With Respect to Accepted Cards.--
            ``(1) In general.--Subject to the limitation contained in 
        paragraph (2), the issuer of an accepted card to a consumer 
        shall be subject to all claims (other than tort claims) and 
        defenses arising out of any transaction in which the accepted 
        card is used as a method of payment, if--
                    ``(A) the consumer has made a good faith attempt to 
                obtain satisfactory resolution of a disagreement or 
                problem relative to the transaction from the person 
                honoring the accepted card;
                    ``(B) the amount of the initial transaction exceeds 
                $50; and
                    ``(C) the transaction was initiated by the consumer 
                in the same State as the mailing address previously 
                provided by the consumer, or within 100 miles from such 
                address, except that the limitations set forth in 
                subparagraphs (A) and (B) with respect to the right of 
                a consumer to assert claims and defenses against the 
                issuer of the card shall not be applicable to any 
                transaction in which the person honoring the accepted 
                card--
                            ``(i) is the same person as the card 
                        issuer;
                            ``(ii) is controlled by the card issuer;
                            ``(iii) is under direct or indirect common 
                        control with the card issuer;
                            ``(iv) is a franchised dealer in the 
                        products or services of the card issuer; or
                            ``(v) has obtained the order for such 
                        transaction through a mail solicitation made by 
                        or participated in by the card issuer in which 
                        the cardholder is solicited to enter into such 
                        transaction by using the accepted card issued 
                        by the card issuer.
            ``(2) Limitation.--The amount of claims or defenses 
        asserted by the cardholder under this subsection may not exceed 
        the amount paid by the cardholder with respect to the subject 
        transaction at the time at which the cardholder first notifies 
        the card issuer or the person honoring the accepted card of 
        such claim or defense.''.

SEC. 6. REGULATIONS.

    Not later than 90 days after the date of enactment of this Act, the 
Board of Governors of the Federal Reserve System shall issue final 
regulations to carry out the amendments made by this Act, which 
regulations shall be consistent, to the extent practicable, with 
regulations issued to carry out similar provisions under the Truth in 
Lending Act.
                                 <all>