SB1829eng 98TH GENERAL ASSEMBLY

  
  
  

 


 
SB1829 EngrossedLRB098 09006 MGM 39141 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Electronic Fund Transfer Act is amended by
5changing Section 10 and by adding Section 46 as follows:
 
6    (205 ILCS 616/10)
7    Sec. 10. Definitions. For purposes of this Act, the words
8and phrases defined in this Section shall have the meanings
9ascribed to them unless the context requires otherwise.
10Whenever the terms "network" and "switch" are used, they shall
11be deemed interchangeable unless, from the context and facts,
12the intention is plain to apply only to one type of entity.
13    "Access device" means a card, code, or other means of
14access to an account, or any combination thereof, that may be
15used by a customer to initiate an electronic fund transfer at a
16terminal.
17    "Account" means a demand deposit, savings deposit, share,
18member, or other customer asset account held by a financial
19institution.
20    An "affiliate" of, or a person "affiliated" with, a
21specified person, means a person that directly, or indirectly
22through one or more intermediaries, controls, is controlled by,
23or is under common control with, the person specified.

 

 

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1    "Commissioner" means the Secretary of Financial and
2Professional Regulation or a person authorized by the
3Secretary, the Division of Banking Act, or this Act to act in
4the Secretary's stead.
5    "Division" means the Division of Banking within the
6Department of Financial and Professional Regulation.
7    "Electronic fund transfer" means a transfer of funds, other
8than a transaction originated by check, draft, or similar paper
9instrument, that is initiated through a terminal for the
10purpose of ordering, instructing, or authorizing a financial
11institution to debit or credit an account.
12    "Financial institution" means a bank established under the
13laws of this or any other state or established under the laws
14of the United States, a savings and loan association or savings
15bank established under the laws of this or any other state or
16established under the laws of the United States, a credit union
17established under the laws of this or any other state or
18established under the laws of the United States, or a licensee
19under the Consumer Installment Loan Act or the Sales Finance
20Agency Act.
21    "General use reloadable card" means a card, code, or other
22access device that is:
23        (1) issued on a prepaid basis primarily for personal,
24    family, or household purposes to a consumer in a specified
25    amount in exchange for payment;
26        (2) issued under an agreement containing terms and

 

 

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1    conditions that permit funds to be added to the card, code,
2    or other device after the initial purchase or issuance,
3    including a temporary non-reloadable card issued solely in
4    connection with a general use reloadable card, code, or
5    other device;
6        (3) not marketed or labeled as a gift card or gift
7    certificate; and
8        (4) redeemable upon presentation at multiple,
9    unaffiliated merchants for goods or services or usable at
10    automated teller machines.
11    "Interchange transaction" means an electronic fund
12transfer that results in exchange of data and settlement of
13funds between 2 or more unaffiliated financial institutions.
14    "Issuer" means a person that issues a general use
15reloadable card or that person's agent with respect to the
16card.
17    "Marketed or labeled as a gift card or gift certificate"
18means directly or indirectly offering, advertising, or
19otherwise suggesting the potential use of a card, code, or
20other device as a gift for another person.
21    "Network" means an electronic information communication
22and processing system that processes interchange transactions.
23    "Person" means a natural person, corporation, unit of
24government or governmental subdivision or agency, trust,
25estate, partnership, cooperative, or association.
26    "Seller of goods and services" means a business entity

 

 

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1other than a financial institution.
2    "Switch" means an electronic information and communication
3processing facility that processes interchange transactions on
4behalf of a network. This term does not include an electronic
5information and communication processing company (1) that is
6owned by a bank holding company or an affiliate of a bank
7holding company and used solely for transmissions among
8affiliates of the bank holding company or (2) to the extent
9that the facility, by virtue of a contractual relationship, is
10used solely for transmissions among affiliates of a bank
11holding company, regardless of whether the facility is an
12affiliate of the bank holding company or operates as a switch
13with respect to one or more networks under an independent
14contractual relationship.
15    "Terminal" means an electronic device through which a
16consumer may initiate an interchange transaction. This term
17does not include (1) a telephone, (2) an electronic device
18located in a personal residence, (3) a personal computer or
19other electronic device used primarily for personal, family, or
20household purposes, (4) an electronic device owned or operated
21by a seller of goods and services unless the device is
22connected either directly or indirectly to a financial
23institution and is operated in a manner that provides access to
24an account by means of a personal and confidential code or
25other security mechanism (other than signature), (5) an
26electronic device that is not accessible to persons other than

 

 

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1employees of a financial institution or affiliate of a
2financial institution, or (6) an electronic device that is
3established by a financial institution on a proprietary basis
4that is identified as such and that cannot be accessed by
5customers of other financial institutions. The Commissioner
6may issue a written rule that excludes additional electronic
7devices from the definition of the term "terminal".
8(Source: P.A. 96-1365, eff. 7-28-10.)
 
9    (205 ILCS 616/46 new)
10    Sec. 46. Disclosure requirements for general use
11reloadable cards.
12    (a) The form of the disclosures made under this Section
13shall adhere to the following standards:
14        (1) The disclosures shall be clear and conspicuous. The
15    disclosures may contain commonly accepted or readily
16    understandable abbreviations or symbols.
17        (2) The disclosures generally shall be provided to the
18    consumer in written or electronic form, except that the
19    disclosures required to be made prior to purchase may be
20    provided orally.
21        (3) The disclosures may be made on or with other
22    documents. For joint accounts, only one set of the required
23    disclosures shall be provided and may be given to any of
24    the account holders.
25        (4) Issuers may design their own disclosure format,

 

 

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1    provided that all fees required to be disclosed under
2    subsection (b) are included and the substance and clarity
3    of the disclosures are not affected.
4    (b) The following disclosures are required:
5        (1) Before a general use reloadable card is purchased,
6    a person that issues the card shall disclose to the
7    consumer the amount of any dormancy, inactivity, or
8    periodic service fee for holding or use of the card that
9    may be charged and how often the fee or fees may be
10    assessed. The disclosures may be displayed on the card
11    packaging or carrier containing the general use reloadable
12    card.
13        (2) A person that issues a general use reloadable card
14    shall include the following disclosures on the card:
15            (A) the expiration date of the card, if any; and
16            (B) a toll-free telephone number and, if one is
17        maintained, a website that a consumer may use to obtain
18        information about fees and to obtain a replacement card
19        after the card expires if the underlying funds may be
20        available thereafter.
21        (3) A person that issues a general use reloadable card
22    shall disclose the amount of each type of fee that may be
23    imposed in connection with the card (or an explanation of
24    how the fee shall be determined), and the conditions under
25    which the fee may be imposed.
26    (c) A card, code, or other access device is not a general

 

 

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1use reloadable card merely because the issuer or processor is
2technically able to add functionality that would otherwise
3enable the card, code, or other access device to be reloaded.
4    (d) Compliance with the federal Electronic Fund Transfer
5Act and any regulations issued under that Act regarding general
6use reloadable card disclosures shall constitute compliance
7with this Section.
8    (e) The requirements of this Section shall apply to any
9general use reloadable card sold to a consumer on or after
10January 1, 2015.
 
11    Section 99. Effective date. This Act takes effect January
121, 2014.