[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2315 Introduced in Senate (IS)]

<DOC>






114th CONGRESS
  1st Session
                                S. 2315

 To provide protection for consumers who have prepaid cards and mobile 
                   accounts, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 19, 2015

Mr. Menendez (for himself, Mr. Merkley, Mr. Blumenthal, and Ms. Warren) 
introduced the following bill; which was read twice and referred to the 
            Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To provide protection for consumers who have prepaid cards and mobile 
                   accounts, 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 ``Prepaid Card and Mobile Account 
Consumer Protection Act of 2015''.

SEC. 2. DEFINITIONS.

    (a) Definition of ``Account''.--Section 903 of the Electronic Fund 
Transfer Act (15 U.S.C. 1693a) is amended by striking paragraph (2) and 
inserting the following:
            ``(2) the term `account'--
                    ``(A) means--
                            ``(i) a demand deposit, savings deposit, or 
                        other asset account (other than an occasional 
                        or incidental credit balance in an open end 
                        credit plan, as defined in section 103(j)), as 
                        described in regulations of the Bureau, 
                        established primarily for personal, family, or 
                        household purposes, as defined by the Bureau, 
                        by rule; and
                            ``(ii) a spending account, as defined in 
                        section 924(a); and
                    ``(B) does not include an account held by a 
                financial institution pursuant to a bona fide trust 
                agreement;''.
    (b) Definition of ``Financial Institution''.--Section 903(9) of the 
Electronic Fund Transfer Act (15 U.S.C. 1693a(9)) is amended by 
striking ``holds an account'' and inserting ``manages, provides, or 
holds an account containing funds''.
    (c) Technical and Conforming Amendments.--Section 903 of the 
Electronic Fund Transfer Act (15 U.S.C. 1693a) is amended--
            (1) by redesignating paragraph (4) (relating to the Board 
        of Governors of the Federal Reserve System), as so designated 
        by section 1084(2)(A) of the Dodd-Frank Wall Street Reform and 
        Consumer Protection Act (Public Law 111-203; 124 Stat. 2081), 
        as paragraph (3); and
            (2) in paragraph (3), as so redesignated, by striking 
        ``term `Bureau' means the Bureau of Governors'' and inserting 
        ``term `Board' means the Board of Governors''.

SEC. 3. SPENDING ACCOUNTS.

    (a) Spending Accounts.--The Electronic Fund Transfer Act (15 U.S.C. 
1693 et seq.) is amended--
            (1) by redesignating section 923 (15 U.S.C. 1693 note), 
        relating to the effective date of the Electronic Fund Transfer 
        Act, as so designated by section 1073 of the Dodd-Frank Wall 
        Street Reform and Consumer Protection Act (Public Law 111-203; 
        124 Stat. 2060), as section 925;
            (2) by redesignating section 922 (15 U.S.C. 1693r), 
        relating to exemptions for State regulation, as so designated 
        by section 1073 of the Dodd-Frank Wall Street Reform and 
        Consumer Protection Act (Public Law 111-203; 124 Stat. 2060), 
        as section 923; and
            (3) by inserting after section 923, as so redesignated, the 
        following:
``Sec. 924. Spending accounts
    ``(a) Definitions.--For purposes of this section--
            ``(1) the term `insured credit union' has the same meaning 
        as in section 101 of the Federal Credit Union Act (12 U.S.C. 
        1752);
            ``(2) the term `insured depository institution' has the 
        same meaning as in section 3 of the Federal Deposit Insurance 
        Act (12 U.S.C. 1813); and
            ``(3) the term `spending account'--
                    ``(A) means a deposit account--
                            ``(i) that is established by a consumer or 
                        on behalf of a consumer at an insured 
                        depository institution or an insured credit 
                        union;
                            ``(ii) that contains the funds of a 
                        consumer;
                            ``(iii) to which payments are to be made by 
                        a consumer, or at the direction of a consumer;
                            ``(iv) to which recurring electronic fund 
                        transfers may be made, at the direction of a 
                        consumer; or
                            ``(v) from which payments may be made at 
                        the direction of a consumer through the use of 
                        a card, code, or device;
                    ``(B) includes a deposit account described in 
                subparagraph (A)--
                            ``(i) that is operated or managed by a 
                        financial institution, or any other person; and
                            ``(ii) the funds of which are--
                                    ``(I) pooled with the funds of a 
                                person other than the person who 
                                established the account; or
                                    ``(II) held in a name other than 
                                that of the person who established the 
                                account; and
                    ``(C) does not include--
                            ``(i) an account described in section 
                        903(2)(A)(i);
                            ``(ii) an account held by a financial 
                        institution pursuant to a bona fide trust 
                        agreement;
                            ``(iii) a nonreloadable, general-use 
                        prepaid card, as defined in section 
                        915(a)(2)(A), in an amount that does not exceed 
                        $250;
                            ``(iv) a general-use prepaid card, as 
                        defined in section 915(a)(2)(A), that is solely 
                        associated with--
                                    ``(I) a health plan to which 
                                section 105 of the Internal Revenue 
                                Code of 1986 applies;
                                    ``(II) a qualified transportation 
                                fringe, as defined in section 132(f) of 
                                the Internal Revenue Code of 1986;
                                    ``(III) a health savings account, 
                                as defined in section 223(d) of the 
                                Internal Revenue Code of 1986; or
                                    ``(IV) any other healthcare benefit 
                                account, including a healthcare account 
                                relating to Medicare or Medicaid 
                                benefits;
                            ``(v) a gift certificate, as defined in 
                        section 915(a)(2)(B);
                            ``(vi) a store gift card, as defined in 
                        section 915(a)(2)(C);
                            ``(vii) an electronic promise, plastic 
                        card, or payment code or device described in 
                        clause (i), (v), or (vi) of section 
                        915(a)(2)(D);
                            ``(viii) a nonreloadable card labeled as a 
                        gift card and marketed solely as a gift card; 
                        or
                            ``(ix) a nonreloadable loyalty, rebate, or 
                        promotional card.
    ``(b) FDIC or NCUA Insurance.--
            ``(1) Insurance required.--Spending accounts shall be 
        structured to provide and maintain separate deposit insurance 
        coverage for the funds of each consumer under the applicable 
        regulations of the Federal Deposit Insurance Corporation or the 
        National Credit Union Administration.
            ``(2) Transfer of funds.--Any person that receives funds in 
        connection with an electronic fund transfer to a spending 
        account shall promptly, and in no event later than 1 business 
        day after the funds are activated--
                    ``(A) transfer such funds to an account at an 
                insured depository institution or an insured credit 
                union, as applicable; and
                    ``(B) credit the spending account in an amount 
                equal to the amount of such funds.
    ``(c) Alternative to Periodic Statement.--
            ``(1) Periodic statement not required.--In the case of an 
        electronic fund transfer from a spending account, a financial 
        institution shall not be subject to the requirement under 
        section 906(c) to provide a periodic statement to a consumer, 
        if the financial institution provides to the consumer--
                    ``(A) access to the account balance of the 
                consumer--
                            ``(i) through a readily available telephone 
                        line;
                            ``(ii) through the Internet;
                            ``(iii) at an electronic terminal or other 
                        device that allows the consumer to make a 
                        balance inquiry, by providing balance 
                        information or, routinely or upon request, on a 
                        receipt provided at the electronic terminal at 
                        the time of an electronic fund transfer; and
                            ``(iv) through text messaging;
                    ``(B) notice of the means by which the consumer may 
                access the account balance of the consumer, including 
                any telephone number;
                    ``(C) in response to an oral or written request of 
                the consumer, a written record of the account 
                transactions of the consumer during the 2-year period 
                ending on the date of the request that includes the 
                information required to be provided to the consumer 
                under section 906(c);
                    ``(D) an electronic record, such as a record 
                available on the Internet, of the account transactions 
                of the consumer during the 2-year period ending on the 
                date on which the consumer accesses the electronic 
                record that includes the information required to be 
                provided to the consumer under section 906(c);
                    ``(E) with at least the same frequency as a written 
                periodic statement that would otherwise be required 
                under section 906, notification by email of the 
                availability of an electronic history or an electronic 
                periodic statement, unless the consumer has declined to 
                provide an email address;
                    ``(F) the option to receive a written statement, 
                either a one-time paper statement or continuous regular 
                monthly paper statements with a single request, and 
                clear and conspicuous notice of such option at the time 
                of enrollment and on the website of the financial 
                institution;
                    ``(G) annual notice of the error resolution 
                procedure for the spending account, as prescribed in 
                regulations of the Bureau; and
                    ``(H) any other transaction information that the 
                financial institution elects to make available and that 
                the consumer elects to receive, such as messages or 
                alerts concerning other balance or transaction 
                information.
            ``(2) Fees prohibited.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a financial institution may not 
                charge a fee for any service provided under paragraph 
                (1).
                    ``(B) Fee for written statement.--A financial 
                institution may charge a fee of not more than $1 for 
                each written statement provided under paragraph (1)(F).
            ``(3) No election by consumer.--If the consumer has not 
        elected to receive written periodic or annual statements, has 
        not elected to receive another regular form of transaction 
        information that the Bureau has determined, by rule, to be 
        equivalent to periodic statements, and has not accessed the 
        account online in the preceding 12-month period, the financial 
        institution shall provide notice to the consumer at least 
        annually of the means by which the consumer may access 
        transaction information and the option to enroll in written 
        periodic or annual statements.
    ``(d) Limitations on Liability.--For purposes of section 909(a), 
reimbursement need not be made to a consumer for a loss relating to a 
spending account that a financial institution establishes would not 
have occurred, but for the failure of the consumer to report any 
unauthorized electronic fund transfer or account error--
            ``(1) not later than 60 days after the date on which 
        account information that includes the unauthorized electronic 
        fund transfer or account error is provided to or accessed by 
        the consumer under subsection (c); or
            ``(2) in extenuating circumstances, such as extended travel 
        or hospitalization, within a longer time that is reasonable 
        under the circumstances.
    ``(e) Fees.--
            ``(1) Fees prohibited.--Except as provided in paragraph 
        (2), a financial institution may not charge in connection with 
        a spending account--
                    ``(A) an annual fee;
                    ``(B) an overdraft fee, including a fee for 
                shortage or nonsufficient funds, or any other fee for a 
                transaction processed for amounts exceeding the account 
                balance;
                    ``(C) a usage fee for use at the point of sale;
                    ``(D) a fee for a declined transaction;
                    ``(E) a fee for the use of an electronic terminal 
                that is in the network of the issuer;
                    ``(F) any fee during periods of inactivity or 
                dormancy, including a periodic fee charged after more 
                than 6 months of inactivity;
                    ``(G) a fee for a balance inquiry or access to 
                transaction information;
                    ``(H) a fee for an inquiry to customer service;
                    ``(I) a finance charge or other fee imposed in 
                connection with an extension of credit;
                    ``(J) an account closing fee or a fee to obtain the 
                remaining balance in the spending account;
                    ``(K) a fee for any activity not described in 
                paragraph (2);
                    ``(L) any fee prohibited by applicable State law; 
                or
                    ``(M) any fee of any kind that would cause the 
                balance to become negative.
            ``(2) Fees permitted.--A financial institution may charge 
        in connection with a spending account--
                    ``(A) a fee for a replacement card--
                            ``(i) of not more than $5 for the first 
                        replacement card requested by a consumer during 
                        any 12-month period; and
                            ``(ii) that is in addition to the 
                        replacement card described in clause (i);
                    ``(B) a fee for expedited delivery of a replacement 
                card;
                    ``(C) a periodic fee, not more frequently than 
                monthly, provided that no periodic fee may be assessed 
                if there has been no deposit or transaction activity in 
                the account during the preceding 3 months;
                    ``(D) a reload fee, or any other fee for adding 
                value to the spending account, if the financial 
                institution provides a reasonable alternate method for 
                adding value to the spending account without a fee;
                    ``(E) a fee for a transfer from the spending 
                account to another account;
                    ``(F) a fee for bill payment;
                    ``(G) a fee for a withdrawal by the consumer from 
                an electronic terminal that is--
                            ``(i) located outside the United States; or
                            ``(ii) not in the network of the financial 
                        institution, including a fee to cover the costs 
                        of any charge to the financial institution by 
                        the owner of the electronic terminal relating 
                        to the use of the electronic terminal by the 
                        consumer;
                    ``(H) a fee for a purchase or a withdrawal in a 
                foreign currency; and
                    ``(I) an activation, initiation, or enrollment fee.
            ``(3) Disclosure of fee information.--
                    ``(A) Disclosure required.--Each financial 
                institution that offers a spending account shall 
                provide to a consumer--
                            ``(i) together with any application, offer, 
                        or solicitation for a spending account--
                                    ``(I) a table of any fees that may 
                                be charged in connection with the 
                                spending account that--
                                            ``(aa) can be easily 
                                        understood by the consumer;
                                            ``(bb) is clearly and 
                                        conspicuously displayed to the 
                                        consumer before purchase; and
                                            ``(cc) includes, at a 
                                        minimum, the amount and a 
                                        description of each fee that 
                                        may be charged by the financial 
                                        institution under paragraph 
                                        (2); and
                                    ``(II) an estimate of the average 
                                total monthly cost to a typical 
                                consumer for using the spending 
                                account, based on a profile of the 
                                typical consumer established by the 
                                Bureau;
                            ``(ii) on the card or other means of 
                        access, a toll-free telephone number and 
                        website at which the consumer may access a 
                        clear and conspicuous disclosure of the fees 
                        that may be charged in connection with the 
                        spending account; and
                            ``(iii) a wallet-sized summary of any fees 
                        that may be charged in connection with the 
                        spending account and a toll-free telephone 
                        number for customer service relating to the 
                        spending account.
                    ``(B) Rules.--Not later than 1 year after the date 
                of enactment of the Prepaid Card and Mobile Account 
                Consumer Protection Act of 2015, the Bureau shall 
                establish, by rule, the headings, content, and format 
                of the fee table, estimate, and wallet-sized fee 
                summary required under subparagraph (A).
    ``(f) Credit Features.--
            ``(1) In general.--No person may offer or provide a 
        spending account that has a credit feature or that can be 
        linked to a credit account that is automatically repaid from 
        the spending account.
            ``(2) Exceptions.--Nothing in this subsection prohibits--
                    ``(A) a consumer from making an electronic fund 
                transfer from a spending account to pay a credit 
                account or from setting up preauthorized electronic 
                fund transfers to pay a credit account; or
                    ``(B) a financial institution from offsetting an 
                inadvertent negative balance in a spending account 
                against the next deposit to that account, provided that 
                the consumer is not charged a fee or finance charge.
    ``(g) Closure of Dormant Accounts.--A financial institution or 
other person that provides, holds, or manages a spending account shall 
close the account and refund any remaining funds to the consumer--
            ``(1) if the account has been inactive for 12 months, or 
        such other period as the Bureau shall establish, by regulation; 
        and
            ``(2) upon request of the consumer to the financial 
        institution or other person using an easily accessible method 
        of contact, that the account be closed.''.
    (b) Consumer Choice.--Section 913 of the Electronic Fund Transfer 
Act (15 U.S.C. 1693k) is amended--
            (1) by striking ``No person may--'' and inserting the 
        following:
    ``(a) In General.--No person may--'';
            (2) in paragraph (1), by striking ``or'' at the end;
            (3) in paragraph (2), by striking the period and inserting 
        ``; or'';
            (4) by inserting after paragraph (2) the following:
            ``(3) issue a card or other means of access for receipt of 
        electronic fund transfers of wages or government benefits 
        unless the recipient has first been offered the option of 
        receiving the funds in a form selected by the recipient from 
        among a set of options specified by the Bureau.''; and
            (5) by adding at the end the following:
    ``(b) Forms of Receipt.--The options for forms of receipt of 
electronic fund transfers of wages or government benefits under 
subsection (a)(3) specified by the Bureau shall include at least 1 of 
the following forms:
            ``(1) direct deposit into an account designated by the 
        recipient;
            ``(2) in cash; and
            ``(3) by check.''.
    (c) Study.--The Bureau shall establish an implementation plan and 
timeline for a prepaid card research study to be completed not later 
than 1 year after the date of enactment of this Act, to determine what, 
if any, differences there are for both the short- and long-term 
economic well-being of consumers at different income levels who use 
spending accounts versus those who use traditional bank accounts for 
their primary means of making financial transactions.
    (d) Technical and Conforming Amendments.--
            (1) Written periodic statements.--Section 906(c) of the 
        Electronic Fund Transfer Act (15 U.S.C. 1693d(c)) is amended in 
        the first sentence of the matter preceding paragraph (1), by 
        striking ``A financial'' and inserting ``Except as provided in 
        section 924(c), a financial''.
            (2) Error resolution.--Section 908(a) of the Electronic 
        Fund Transfer Act (15 U.S.C. 1693f(a)) is amended by striking 
        ``or notification pursuant to section 906(b)'' and inserting 
        ``, notification pursuant to section 906(b), or written or 
        electronic documentation pursuant to section 924(c)''.

SEC. 4. EXPEDITED FUNDS AVAILABILITY.

    The Expedited Funds Availability Act (12 U.S.C. 4001 et seq.) is 
amended--
            (1) in section 601(1) (12 U.S.C. 4001(1)), by inserting ``, 
        spending account (as defined in section 924(a) of the 
        Electronic Fund Transfer Act),'' after ``deposit account''; and
            (2) in section 603 (12 U.S.C. 4002), by adding at the end 
        the following:
    ``(g) Checks Deposited by Remote Deposit Capture.--
            ``(1) In general.--Funds deposited in an account by the 
        transmission by the accountholder of an image of a check using 
        a mobile device or computer shall be available on the same 
        schedule as a check deposited at an automated teller machine 
        under this section.
            ``(2) Time period adjustment to prevent fraud.--The Board, 
        jointly with the Director of the Bureau of Consumer Financial 
        Protection, may increase the time period described in paragraph 
        (1) if the Board, jointly with the Director of the Bureau of 
        Consumer Financial Protection, determines that such an increase 
        is necessary to prevent fraud.''.

SEC. 5. SEVERABILITY.

    If any provision of this Act or an amendment made by this Act, or 
the application of the provision or amendment to any person or 
circumstance, is held to be unconstitutional, the remainder of this Act 
and the amendments made by this Act, and the application of the 
provisions of this Act and the amendments made by this Act to any other 
person or circumstance, shall not be affected.

SEC. 6. EFFECTIVE DATE.

    This Act and the amendments made by this Act shall become effective 
9 months after the date of enactment of this Act.
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