Full Text of HB4451 97th General Assembly
HB4451 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 HB4451 Introduced 1/30/2012, by Rep. Elizabeth Hernandez SYNOPSIS AS INTRODUCED: |
| 205 ILCS 657/5 | | 205 ILCS 657/65 | | 205 ILCS 657/66 new | | 205 ILCS 657/76 new | |
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Amends the Transmitters of Money Act. Defines "general-use prepaid card". Provides that all vendors of general-use prepaid cards must be licensees or authorized sellers of licensees. Provides that a vendor of a general-use prepaid card may charge an activation fee not to exceed the greater of $1 or 1% of the value of the card. Provides that, subject to certain exceptions, no person shall impose a reloading fee, balance check fee, overdraft protection fee, dormancy fee, inactivity charge, or service fee with respect to a general-use prepaid card. Provides that the vendor of a general-use prepaid card shall inform the purchaser of a charge or fee before the card is purchased. Sets forth certain prohibited acts that any vendor issuing, selling, or offering for sale general-use prepaid cards may not commit. Provides that no licensee or authorized seller of a licensee may cash checks for a fee unless licensed under the Currency Exchange Act.
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| | A BILL FOR |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Transmitters of Money Act is amended by | 5 | | changing Sections 5 and 65 and by adding Sections 66 and 76 as | 6 | | follows:
| 7 | | (205 ILCS 657/5)
| 8 | | Sec. 5. Definitions. As used in this Act, unless the | 9 | | context otherwise
requires, the words and phrases defined in | 10 | | this Section have the meanings
set forth in this Section.
| 11 | | "Authorized seller" means a person not an employee of a | 12 | | licensee who
engages in the business regulated by this Act on | 13 | | behalf of a licensee under
a contract between that person and | 14 | | the licensee.
| 15 | | "Balance check fee" means a fee assessed to a consumer for | 16 | | checking the balance on a general-use prepaid card. | 17 | | "Bill payment service" means the business of transmitting | 18 | | money on behalf
of an Illinois resident for the purpose of | 19 | | paying the resident's bills.
| 20 | | "Controlling person" means a person owning or holding the | 21 | | power to vote
25% or more of the outstanding voting securities | 22 | | of a licensee or the power to
vote the securities of another | 23 | | controlling person of the licensee. For
purposes of determining |
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| 1 | | the percentage of a licensee controlled by a
controlling | 2 | | person,
the person's interest shall be combined with the | 3 | | interest of any other
person controlled, directly or | 4 | | indirectly, by that person
or by a spouse, parent, or child of | 5 | | that person.
| 6 | | "Department" means the Department of Financial and | 7 | | Professional Regulation Institutions .
| 8 | | "Director" means the Director of the Division of Financial | 9 | | Institutions.
| 10 | | "Dormancy fee" or "inactivity charge or fee" means a fee, | 11 | | charge, or penalty for non-use or inactivity of a general-use | 12 | | prepaid card. | 13 | | "General-use prepaid card" or "stored value card" means an | 14 | | electronic promise, plastic card, or other payment code or | 15 | | device, not marketed or labeled as a gift card, issued by any | 16 | | person that is: | 17 | | (1) redeemable or honored, upon presentation, at | 18 | | multiple, unaffiliated merchants or service providers, or | 19 | | automated teller machines; | 20 | | (2) issued in a requested amount, whether or not that | 21 | | amount may, at the option of the issuer, be increased in | 22 | | value or reloaded if requested by the holder; | 23 | | (3) purchased or loaded on a prepaid basis; and | 24 | | (4) can be used to withdraw cash at automated teller | 25 | | machines or by other means, including cash back | 26 | | transactions whereby an amount is added to the total |
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| 1 | | purchase price of a transaction and a consumer receives | 2 | | that amount in cash along with the purchase. | 3 | | The term "general-use prepaid card" or "stored value card" | 4 | | does not include an electronic promise, plastic card, or | 5 | | payment code or device that is: | 6 | | (1) used solely for telephone services; | 7 | | (2) a loyalty, award, or promotional gift card; | 8 | | (3) not marketed to the general public; | 9 | | (4) issued in paper form only (including for tickets | 10 | | and events); | 11 | | (5) not redeemable at automated teller machines or for | 12 | | cash back; | 13 | | (6) redeemable solely for admission to events or venues | 14 | | at a particular location or group of affiliated locations, | 15 | | which may also include services or goods obtainable: | 16 | | (A) at the event or venue after admission; or | 17 | | (B) in conjunction with admission to such events or | 18 | | venues at specific locations affiliated with and in | 19 | | geographic proximity to the event or venue. | 20 | | "Licensee" means a person licensed under this Act.
| 21 | | "Location" means a place of business at which activity | 22 | | regulated by this Act
occurs.
| 23 | | "Material litigation" means any litigation that, according | 24 | | to generally
accepted accounting principles, is deemed | 25 | | significant to a licensee's financial
health and would be | 26 | | required to be referenced in a licensee's annual audited
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| 1 | | financial statements, reports to shareholders, or similar | 2 | | documents.
| 3 | | "Money" means a medium of exchange that is authorized or | 4 | | adopted by a
domestic or foreign government as a part of its | 5 | | currency and that is
customarily used and accepted as a medium | 6 | | of exchange in the country of
issuance.
| 7 | | "Money transmitter" means a person
who is located in or | 8 | | doing business in this State and who directly or through
| 9 | | authorized sellers does any of the
following in this State:
| 10 | | (1) Sells or issues payment instruments.
| 11 | | (2) Engages in the business of receiving money for | 12 | | transmission or
transmitting money.
| 13 | | (3) Engages in the business of exchanging, for | 14 | | compensation, money of the
United States Government or a | 15 | | foreign government to or from money of another
government.
| 16 | | "Outstanding payment instrument" means, unless otherwise | 17 | | treated by or
accounted for under generally accepted accounting | 18 | | principles on the books of
the licensee, a payment instrument | 19 | | issued by the
licensee that has been sold in the United States | 20 | | directly by the licensee
or
has been sold in the United States | 21 | | by an
authorized seller of the licensee and reported
to the | 22 | | licensee as having been sold, but has not been paid by or for
| 23 | | the licensee.
| 24 | | "Overdraft protection" means a credit arrangement under | 25 | | which an issuer of general use prepaid cards automatically | 26 | | extends a loan to cover an amount that exceeds the general use |
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| 1 | | prepaid card account balance. | 2 | | "Overdraft protection fee" means a fee charged by a | 3 | | licensee for overdraft protection. | 4 | | "Payment instrument" means a check, draft, money order, | 5 | | traveler's check, general-use prepaid
stored value card, or
| 6 | | other instrument or memorandum, written order or written | 7 | | receipt for the
transmission or payment of money sold or issued | 8 | | to one or more persons whether
or not that instrument or order | 9 | | is negotiable. Payment instrument does not
include an | 10 | | instrument that is redeemable by the issuer in merchandise or
| 11 | | service, a credit card voucher, or a letter of credit. A | 12 | | written order for the
transmission or payment of money that | 13 | | results in the issuance of a check,
draft, money order, | 14 | | traveler's check, or other instrument or memorandum is not
a
| 15 | | payment instrument.
| 16 | | "Person" means an individual, partnership, association, | 17 | | joint stock
association, corporation, or any other form of | 18 | | business organization.
| 19 | | "Reloading fee" means a fee charged to load cash or value | 20 | | to a general-use prepaid card. | 21 | | "Service fee" means a periodic fee, charge, or penalty for | 22 | | holding or use of a general-use prepaid card. The term "service | 23 | | fee" does not include a one-time initial issuance fee. | 24 | | "Stored value card" means any magnetic stripe card or other | 25 | | electronic
payment instrument given in exchange for
money and | 26 | | other similar consideration, including but not limited to
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| 1 | | checks, debit payments, money orders, drafts, credit payments, | 2 | | and traveler's
checks,
where the card
or other
electronic | 3 | | payment instrument represents a dollar value that the
consumer | 4 | | can either use or give to another
individual.
| 5 | | "Transmitting money" means the transmission of money by any | 6 | | means, including
transmissions to or from locations within the | 7 | | United States or to and from
locations outside of the United | 8 | | States by payment instrument, facsimile or
electronic | 9 | | transfer, or otherwise, and includes bill payment
services.
| 10 | | "Vendor" means a licensee or an authorized seller of a | 11 | | licensee that sells or offers to sell general-use prepaid cards | 12 | | to consumers. | 13 | | (Source: P.A. 92-400, eff. 1-1-02; 93-535, eff. 1-1-04.)
| 14 | | (205 ILCS 657/65)
| 15 | | Sec. 65. Notice of source of instrument; transaction | 16 | | records.
| 17 | | (a) Every payment instrument other than a general-use | 18 | | prepaid stored value card sold through
an authorized seller | 19 | | shall bear
the name of the licensee and a unique consecutive | 20 | | number clearly stamped or
imprinted on it. When an order for | 21 | | the transmission of money
results in the issuance of a payment | 22 | | instrument, both the order and the
payment
instrument may bear | 23 | | the same unique number.
| 24 | | (b) A licensee or authorized seller shall create a record, | 25 | | which may be
reduced to computer or other electronic medium, |
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| 1 | | upon receiving any money from a
customer.
| 2 | | (c) For each payment instrument other than a general-use | 3 | | prepaid stored value card sold, the
licensee shall require the
| 4 | | authorized seller to record the face amount
of the payment | 5 | | instrument and the serial number of the payment instrument.
| 6 | | (d) For each transmission of money, the licensee or | 7 | | authorized seller shall
record the date the money was received, | 8 | | the face amount of the payment
instrument, the name of the | 9 | | customer, the manner of transmission, including the
identity | 10 | | and location of any bank or other financial institution | 11 | | receiving or
otherwise involved in accomplishing the | 12 | | transmission, the location to which the
money is transmitted if | 13 | | different from the bank or other financial institution
required | 14 | | to be
recorded, the name of the intended recipient, and the | 15 | | date the
transmission was accomplished or the money was | 16 | | refunded to the customer due to
an
inability to transmit or | 17 | | failure of the intended recipient to receive or obtain
the | 18 | | money transmitted. The
transmission shall be made by the | 19 | | licensee or authorized seller within
3 business days after the | 20 | | receipt of the money to be transmitted. The
licensee or | 21 | | authorized seller, in addition to the records required to be | 22 | | kept,
shall issue a receipt to each person delivering or | 23 | | depositing money
with the licensee or authorized seller | 24 | | indicating the date of the transaction,
the face amount of the | 25 | | payment instrument, to whom the money is to be
transmitted, the | 26 | | service charge, and the name and address of the licensee or
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| 1 | | authorized seller.
The receipt or a separate disclosure at the | 2 | | time of the money transmission
shall also include a statement | 3 | | of the licensee's refund procedures as well
as a toll-free | 4 | | telephone number for customer assistance. An inadvertent or
| 5 | | non-wilful failure to give a consumer the disclosure provided | 6 | | for in this
Section shall not constitute a violation of this | 7 | | Act.
The licensee or authorized seller shall keep a copy of
| 8 | | every receipt in a permanent record book or maintain the data | 9 | | embodied in the
receipt using photographic, electronic, or | 10 | | other means.
| 11 | | (e) For each exchange of money of the United States | 12 | | government or a foreign
government to or from money of another | 13 | | government, the licensee or authorized
seller shall record the | 14 | | date of the transaction, the amount of the transaction,
the | 15 | | amount of funds stated in currency received by the recipient, | 16 | | and
the rate of exchange at the time of the transaction. The | 17 | | licensee or
authorized seller, in addition to the records | 18 | | required to be kept, shall
issue a receipt to each person | 19 | | delivering or depositing money with the licensee
or authorized | 20 | | seller indicating the date of the transaction, the amount of | 21 | | the
transaction, the service charge, and the name and address | 22 | | of the licensee or
authorized seller making the transaction. | 23 | | The licensee or authorized seller
shall keep a copy of every | 24 | | receipt in a permanent record book or maintain data
embodied in | 25 | | the receipt using photographic, electronic, or
other means.
| 26 | | (f) Records required to be kept by the licensee or |
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| 1 | | authorized seller under
this Act shall be preserved for at | 2 | | least 5 years or as required to
comply with any other Act the | 3 | | administration of which is vested in the
Director. The records | 4 | | shall be made available for examination in accordance
with | 5 | | Sections 55 and 60 of this Act.
| 6 | | (Source: P.A. 93-535, eff. 1-1-04.)
| 7 | | (205 ILCS 657/66 new) | 8 | | Sec. 66. General-use prepaid cards. | 9 | | (a) Except as otherwise provided in this Act, this Section | 10 | | applies to all persons that issue, sell, or offer for sale | 11 | | general-use prepaid cards to consumers. All vendors of | 12 | | general-use prepaid cards must be licensees or authorized | 13 | | sellers of a licensee under Section 75 of this Act, unless | 14 | | otherwise exempt from the requirements of this Act. | 15 | | (b) A vendor may charge an activation fee not to exceed the | 16 | | greater of $1 or 1% of the value of the general-use prepaid | 17 | | card. Only one activation fee may be charged per general-use | 18 | | prepaid card. No vendor shall charge or collect any sum in | 19 | | excess of those allowed by this Act. | 20 | | The schedule of fees and charges permitted under this | 21 | | Section shall be conspicuously disclosed on the face of the | 22 | | general-use prepaid card or on any packaging. | 23 | | (c) Except as provided under subsections (d), (e), and (f), | 24 | | no person shall impose a reloading fee, balance check fee, | 25 | | overdraft protection fee, dormancy fee, inactivity charge or |
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| 1 | | fee, or service fee with respect to a general-use prepaid card. | 2 | | (d) A dormancy fee, inactivity charge or fee, or service | 3 | | fee may be charged with respect to a general-use prepaid card, | 4 | | if: | 5 | | (1) there has been no activity with respect to the | 6 | | general-use prepaid card in the 18-month period ending on | 7 | | the date on which the charge or fee is imposed; | 8 | | (2) the disclosure requirements of subsection (e) have | 9 | | been met; | 10 | | (3) not more than one dormancy, inactivity charge or | 11 | | fee, or service fee may be charged per month of inactivity, | 12 | | not to exceed $1 or 1% of the value of the card, whichever | 13 | | is less, on the date of assessment; and | 14 | | (4) any additional requirements that the Secretary may | 15 | | deem necessary. | 16 | | (e) The general-use prepaid card shall clearly and | 17 | | conspicuously state: | 18 | | (1) that a dormancy fee, inactivity charge or fee, or | 19 | | service fee may be charged; | 20 | | (2) the amount of the fee or charge; | 21 | | (3) how often the fee or charge may be assessed; and | 22 | | (4) that the fee or charge may be assessed for | 23 | | inactivity. | 24 | | The vendor of a general-use prepaid card shall inform the | 25 | | purchaser of any charge or fee before the general-use prepaid | 26 | | card is purchased, regardless of whether the general-use |
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| 1 | | prepaid card is purchased in person, over the Internet, or by | 2 | | telephone. | 3 | | (f) The prohibition under subsection (c) shall not apply to | 4 | | any general-use prepaid card: | 5 | | (1) that is distributed pursuant to an award, loyalty, | 6 | | or promotional program; and | 7 | | (2) with respect to which there is no money or other | 8 | | value exchanged. | 9 | | (g) Any vendor issuing, selling, or offering for sale | 10 | | general–use prepaid cards may not commit, or have committed on | 11 | | behalf of the vendor, any of the following acts: | 12 | | (1) selling or issuing a general-use prepaid card that | 13 | | is subject to an expiration date; | 14 | | (2) using any device or agreement that would have the | 15 | | effect of charging or collecting more fees or charges than | 16 | | allowed by this Act, including, but not limited to, | 17 | | entering into a different type of transaction with the | 18 | | consumer; | 19 | | (3) engaging in unfair, deceptive, or fraudulent | 20 | | practices in the issuing or selling of a general-use | 21 | | prepaid card; | 22 | | (4) using or causing to be published or disseminated | 23 | | any advertising communication that contains false, | 24 | | misleading, or deceptive statements or representations; | 25 | | (5) making loans of money, discounting notes, bills of | 26 | | exchange, or other evidences of debt, including overdraft |
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| 1 | | protection; | 2 | | (6) extending credit; or | 3 | | (7) charging any fees or charges other than those | 4 | | specifically authorized by this Act. | 5 | | (h) In addition to the requirements of this Act, all | 6 | | vendors must comply with all State and federal requirements | 7 | | applicable to general-use prepaid cards. | 8 | | (205 ILCS 657/76 new) | 9 | | Sec. 76. Check cashing. No licensee under this Act or | 10 | | authorized seller of a licensee may cash checks for a fee | 11 | | unless licensed under the Currency Exchange Act, or unless the | 12 | | licensee or authorized seller is an entity exempt from that Act | 13 | | under subsection (b) of Section 1 of the Currency Exchange Act | 14 | | and operating in compliance with the Check Cashing Act. This | 15 | | Section does not apply to any transaction where a customer | 16 | | presents a check for the exact amount of any purchase.
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