[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4943 Introduced in Senate (IS)]
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118th CONGRESS
2d Session
S. 4943
To amend the Electronic Fund Transfer Act to treat fraudulently induced
electronic fund transfers in the same manner as unauthorized electronic
fund transfers, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 1, 2024
Mr. Blumenthal (for himself 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 amend the Electronic Fund Transfer Act to treat fraudulently induced
electronic fund transfers in the same manner as unauthorized electronic
fund transfers, 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 ``Protecting Consumers From Payment
Scams Act''.
SEC. 2. TREATMENT OF FRAUDULENTLY INDUCED ELECTRONIC FUND TRANSFERS.
(a) Definitions.--Section 903 of the Electronic Fund Transfer Act
(15 U.S.C. 1693a) is amended--
(1) in paragraph (7)--
(A) by striking subparagraphs (B) and (E);
(B) by redesignating subparagraphs (C) and (D) as
subparagraphs (B) and (C), respectively;
(C) in subparagraph (B), as so redesignated, by
adding ``or'' at the end; and
(D) in subparagraph (C), as so redesignated, by
striking ``or'' at the end;
(2) by striking paragraph (9) and inserting the following:
``(9) the term `financial institution' means--
``(A) a State or National bank, a State or Federal
savings and loan association, a mutual savings bank, a
State or Federal credit union, or any other person who,
directly or indirectly, holds an account belonging to a
consumer; or
``(B) any person that--
``(i) issues an accepted card or other
means of access or provides other means to
facilitate an electronic fund transfer; and
``(ii) agrees, directly or indirectly, with
a consumer to provide electronic fund transfer
services;''; and
(3) by striking paragraph (12) and inserting the following:
``(12) the term `unauthorized or fraudulently induced
electronic fund transfer'--
``(A) means an electronic fund transfer from a
consumer's account initiated by--
``(i) a person other than the consumer
without actual authority to initiate such
transfer; or
``(ii) the consumer, if the consumer's
authorization or initiation of the electronic
fund transfer was fraudulently induced; and
``(B) does not include any electronic fund
transfer--
``(i) initiated by a natural person other
than the consumer who was furnished with the
card, code, or other means of access to such
consumer's account by such consumer, unless--
``(I) the consumer has notified the
financial institution involved that
transfers by such other person are no
longer authorized; or
``(II) the consumer was
fraudulently or coercively induced to
furnish the card, code, or other means
of access;
``(ii) initiated by a consumer who has
fraudulent intent, or anyone acting in concert
with such a consumer; or
``(iii) which constitutes an error
committed by a financial institution.''.
(b) Definition of Error.--Section 908(f) of the Electronic Fund
Transfer Act (15 U.S.C. 1693f(f)) is amended--
(1) in paragraph (2), by inserting ``, including a mistake
or other error made by a consumer'' before the semicolon;
(2) by redesignating paragraphs (6) and (7) as paragraphs
(8) and (9), respectively; and
(3) by inserting after paragraph (5) the following:
``(6) the consumer's inability to access funds in a frozen,
closed, or otherwise inaccessible account, except as required
by a court order or law enforcement or unless the financial
institution determines that the consumer obtained the funds
through unlawful or fraudulent means;
``(7) a reflection on a periodic statement of goods or
services not accepted by the consumer or the designee of the
consumer or not delivered to the consumer or the designee of
the consumer;''.
(c) Consumer Liability for Unauthorized or Fraudulently Induced
Transfers.--Section 909 of the Electronic Fund Transfer Act (15 U.S.C.
1693g) is amended--
(1) in the heading, by striking ``unauthorized transfers''
and inserting ``unauthorized or fraudulently induced electronic
fund transfers'';
(2) by striking ``unauthorized electronic fund transfer''
each place such term appears and inserting ``unauthorized or
fraudulently induced electronic fund transfer'';
(3) by striking ``unauthorized electronic fund transfers''
each place such term appears and inserting ``unauthorized or
fraudulently induced electronic fund transfers'';
(4) in subsection (a)--
(A) by striking ``unauthorized transfer'' and
inserting ``unauthorized or fraudulently induced
electronic fund transfer''; and
(B) by inserting ``fraudulently induced transfer
or'' before ``loss or theft'' each place such term
appears;
(5) in subsection (b)--
(A) by striking ``financial institution to show
that'' and inserting ``financial institution--
``(1) to show that'';
(B) by striking ``was authorized or, if the
electronic fund transfer was unauthorized, then the
burden of proof is upon the financial institution'' and
inserting ``was authorized or was not fraudulently
induced, as applicable; or
``(2) if the showing under paragraph (1) is not made,'';
and
(C) by striking ``, if the transfer was initiated
after the effective date of section 905,''; and
(6) by adding at the end the following:
``(f) Shared Liability of Institutions Involved in an Unauthorized
or Fraudulently Induced Electronic Fund Transfer.--
``(1) Crediting of consumer account.--A financial
institution shall reimburse the consumer for the amount of an
electronic fund transfer that was unauthorized or fraudulently
induced, subject to any liability of the consumer under
subsection (a).
``(2) Liability sharing.--Subject to paragraph (3) and with
respect to a loss suffered by a financial institution in
connection with crediting a consumer's account for an
electronic fund transfer that was unauthorized or fraudulently
induced, the liability for such loss shall be evenly shared
between the financial institution holding the consumer's
account and the financial institution that received the
transfer.
``(3) Liability of certain institutions that materially
support other financial institutions.--
``(A) Rulemaking.--The Bureau may issue--
``(i) a rule to identify certain financial
institutions or classes of financial
institutions described in section 903(9)(B)
that materially support other financial
institutions in carrying out electronic fund
transfers; and
``(ii) such other rules as the Bureau
determines are necessary or appropriate to
implement the shared liability provisions under
this subsection.
``(B) Liability.--With respect to a loss described
in paragraph (2) in connection with an electronic fund
transfer, if any financial institution identified under
subparagraph (A) is described in section 903(9)(B) with
respect to such transfer, each financial institution
and the 2 financial institutions described in paragraph
(2) shall evenly share the liability for such loss.''.
(d) Rule of Construction.--Nothing in this Act or the amendments
made by this Act may be construed to limit the authority of the Bureau
of Consumer Financial Protection or the applicability of relevant
consumer financial protection laws that may otherwise impose
requirements that are being amended by this Act.
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