Bill Text: IL HB2432 | 2013-2014 | 98th General Assembly | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Amends the Electronic Fund Transfer Act. Provides that a person who sells or issues general use reloadable cards shall disclose, prior to sale or issuance of the card, any fees imposed by the issuer. Provides certain requirements for the disclosures. Makes other changes. Effective January 1, 2014.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Passed) 2013-08-16 - Public Act . . . . . . . . . 98-0415 [HB2432 Detail]

Download: Illinois-2013-HB2432-Engrossed.html

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

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

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

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

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

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

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use reloadable card merely because the issuer or processor is
technically able to add functionality that would otherwise
enable the card, code, or other access device to be reloaded.
(d) Compliance with the federal Electronic Fund Transfer
Act and any regulations issued under that Act regarding general
use reloadable card disclosures shall constitute compliance
with this Section.
(e) The requirements of this Section shall apply to any
general use reloadable card sold to a consumer on or after
January 1, 2015.