Bill Text: IL HB4451 | 2011-2012 | 97th General Assembly | Introduced
Bill Title: 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.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2013-01-08 - Session Sine Die [HB4451 Detail]
Download: Illinois-2011-HB4451-Introduced.html
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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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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:
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7 | (205 ILCS 657/5)
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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.
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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.
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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.
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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.
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6 | "Department" means the Department of Financial and | ||||||
7 | Professional Regulation Institutions .
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8 | "Director" means the Director of the Division of Financial | ||||||
9 | Institutions.
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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.
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21 | "Location" means a place of business at which activity | ||||||
22 | regulated by this Act
occurs.
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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.
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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.
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7 | "Money transmitter" means a person
who is located in or | ||||||
8 | doing business in this State and who directly or through
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9 | authorized sellers does any of the
following in this State:
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10 | (1) Sells or issues payment instruments.
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11 | (2) Engages in the business of receiving money for | ||||||
12 | transmission or
transmitting money.
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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.
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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
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23 | the licensee.
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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
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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
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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
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15 | payment instrument.
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16 | "Person" means an individual, partnership, association, | ||||||
17 | joint stock
association, corporation, or any other form of | ||||||
18 | business organization.
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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.
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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.
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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.)
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14 | (205 ILCS 657/65)
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15 | Sec. 65. Notice of source of instrument; transaction | ||||||
16 | records.
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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.
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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.
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2 | (c) For each payment instrument other than a general-use | ||||||
3 | prepaid stored value card sold, the
licensee shall require the
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4 | authorized seller to record the face amount
of the payment | ||||||
5 | instrument and the serial number of the payment instrument.
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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
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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
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8 | every receipt in a permanent record book or maintain the data | ||||||
9 | embodied in the
receipt using photographic, electronic, or | ||||||
10 | other means.
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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.
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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.
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6 | (Source: P.A. 93-535, eff. 1-1-04.)
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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.
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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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