[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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