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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                            CHAPTER 295-H.F.No. 2500 
                  An act relating to financial institutions; limiting 
                  customer liability for loss or theft of a debit card; 
                  amending Minnesota Statutes 1996, section 47.69, 
                  subdivision 3. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1996, section 47.69, 
        subdivision 3, is amended to read: 
           Subd. 3.  Every financial institution using an electronic 
        financial terminal shall maintain reasonable procedures to 
        minimize losses from unauthorized withdrawals from its 
        customers' accounts by use of an electronic financial terminal.  
        After a customer makes a bona fide deposit or payment at an 
        electronic financial terminal and has received a receipt, any 
        loss due to theft or other reason shall not be borne by the 
        customer; provided, loss due to the nonpayment or dishonor of a 
        check, or other order for payment, deposited at an electronic 
        financial terminal shall be governed by the applicable 
        provisions of chapter 336.  A financial institution shall be 
        liable for all unauthorized withdrawals unless the unauthorized 
        withdrawal was due to the loss or theft of the customer machine 
        readable card, including a debit card, in which case the 
        customer shall be liable, subject to a maximum liability of $50, 
        for those unauthorized withdrawals made prior to the time the 
        financial institution is notified of the loss or theft.  With 
        respect to debit card transactions, this subdivision applies to 
        unauthorized withdrawals made from an electronic financial 
        terminal or from an electronic point-of-sale terminal operated 
        by a retailer, described in section 47.61, subdivision 3, 
        paragraph (b), clause (3).  The limitation on liability is 
        effective only if the issuer is notified of unauthorized charges 
        contained in a bill within 60 days of receipt of the bill by the 
        person in whose name the card is issued.  For purposes of this 
        subdivision, "unauthorized withdrawal" means a withdrawal by a 
        person other than the customer without actual authority to 
        initiate the withdrawal and from which the customer receives no 
        benefit.  The term does not include any withdrawal that is:  (1) 
        initiated by a person who was furnished with the card by the 
        customer, unless the customer has notified the financial 
        institution involved that transfers by that person are no longer 
        authorized; (2) initiated with fraudulent intent by the customer 
        or any person acting in concert with the customer; or (3) 
        initiated by the financial institution or its employee.  
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective August 1, 1998. 
           Presented to the governor March 17, 1998 
           Signed by the governor March 18, 1998, 4:32 p.m.