HF 2500

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to financial institutions; limiting customer 
  1.3             liability for loss or theft of a debit card; amending 
  1.4             Minnesota Statutes 1996, section 47.69, subdivision 3; 
  1.5             Minnesota Statutes 1997 Supplement, section 47.61, 
  1.6             subdivision 3. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1997 Supplement, section 
  1.9   47.61, subdivision 3, is amended to read: 
  1.10     Subd. 3.  (a) "Electronic financial terminal" means an 
  1.11  electronic information processing device that is established to 
  1.12  do either or both of the following: 
  1.13     (1) capture the data necessary to initiate financial 
  1.14  transactions; or 
  1.15     (2) through its attendant support system, store or initiate 
  1.16  the transmission of the information necessary to consummate a 
  1.17  financial transaction. 
  1.18     (b) "Electronic financial terminal" does not include: 
  1.19     (1) a telephone; 
  1.20     (2) an electronic information processing device that is 
  1.21  used internally by a financial institution to conduct the 
  1.22  business activities of the institution; 
  1.23     (3) an electronic point-of-sale terminal operated by a 
  1.24  retailer that is used to process payments for the purchase of 
  1.25  goods and services by consumers, and which also may be used to 
  1.26  obtain cash advances or cash back not to exceed $25 and only if 
  2.1   incidental to the retail sale transactions, through the use of 
  2.2   credit cards or debit cards, provided that the payment 
  2.3   transactions using debit cards are subject to section 47.69, 
  2.4   subdivision 3, and the federal Electronic Funds Transfer Act, 
  2.5   United States Code, title 12, sections 1693 et seq., and 
  2.6   Regulation E of the Federal Reserve Board, Code of Federal 
  2.7   Regulations, title 12, subpart 205.2; this clause does not 
  2.8   exempt the retailer from liability for negligent conduct or 
  2.9   intentional misconduct of the operator under section 47.69, 
  2.10  subdivision 5; 
  2.11     (4) stored-value cards to only process transactions other 
  2.12  than those authorized by this section.  Stored-value cards are 
  2.13  transaction cards having magnetic stripes or computer chips that 
  2.14  enable electronic value to be added or deducted as needed; or 
  2.15     (5) a personal computer possessed by and operated 
  2.16  exclusively by the account holder. 
  2.17     Sec. 2.  Minnesota Statutes 1996, section 47.69, 
  2.18  subdivision 3, is amended to read: 
  2.19     Subd. 3.  Every financial institution using an electronic 
  2.20  financial terminal shall maintain reasonable procedures to 
  2.21  minimize losses from unauthorized withdrawals from its 
  2.22  customers' accounts by use of an electronic financial terminal.  
  2.23  After a customer makes a bona fide deposit or payment at an 
  2.24  electronic financial terminal and has received a receipt, any 
  2.25  loss due to theft or other reason shall not be borne by the 
  2.26  customer; provided, loss due to the nonpayment or dishonor of a 
  2.27  check, or other order for payment, deposited at an electronic 
  2.28  financial terminal shall be governed by the applicable 
  2.29  provisions of chapter 336.  A financial institution shall be 
  2.30  liable for all unauthorized withdrawals unless the unauthorized 
  2.31  withdrawal was due to the loss or theft of the customer machine 
  2.32  readable card, including a debit card, in which case the 
  2.33  customer shall be liable, subject to a maximum liability of $50, 
  2.34  for those unauthorized withdrawals made prior to the time the 
  2.35  financial institution is notified of the loss or theft.  The 
  2.36  limitation on liability is effective only if the issuer is 
  3.1   notified of unauthorized charges contained in a bill within 60 
  3.2   days of receipt of the bill by the person in whose name the card 
  3.3   is issued.  For purposes of this subdivision, "unauthorized 
  3.4   withdrawal" means a withdrawal by a person other than the 
  3.5   customer without actual authority to initiate the withdrawal and 
  3.6   from which the customer receives no benefit.  The term does not 
  3.7   include any withdrawal that is:  (1) initiated by a person who 
  3.8   was furnished with the card by the customer, unless the customer 
  3.9   has notified the financial institution involved that transfers 
  3.10  by that person are no longer authorized; (2) initiated with 
  3.11  fraudulent intent by the customer or any person acting in 
  3.12  concert with the customer; or (3) initiated by the financial 
  3.13  institution or its employee.  
  3.14     Sec. 3.  [EFFECTIVE DATE.] 
  3.15     Sections 1 and 2 are effective August 1, 1998.