ASSEMBLY, No. 1351

STATE OF NEW JERSEY

216th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2014 SESSION

 


 

Sponsored by:

Assemblywoman  LINDA STENDER

District 22 (Middlesex, Somerset and Union)

Assemblyman  TROY SINGLETON

District 7 (Burlington)

Assemblyman  BENJIE E. WIMBERLY

District 35 (Bergen and Passaic)

Assemblywoman  MARLENE CARIDE

District 36 (Bergen and Passaic)

Assemblyman  DANIEL R. BENSON

District 14 (Mercer and Middlesex)

 

Co-Sponsored by:

Assemblyman Caputo

 

 

 

 

SYNOPSIS

     Limits fees charged in connection with certain prepaid debit accounts; requires access to certain account information.

 

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel

  


An Act concerning prepaid debit accounts and supplementing Title 17 of the Revised Statutes.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    As used in this act:

     “Access device” means a card, code, or other means to access a prepaid debit account.

     “Consumer” means a natural person.

     “Financial institution” means a State or National bank, a State or Federal savings and loan association, a mutual savings bank, a State or Federal credit union, or any other person who, directly or indirectly, holds a prepaid debit account belonging to a consumer.

     “Payroll card account” means an account that is directly or indirectly established through an employer and to which electronic fund transfers of the account owner's wages, salary, or other employee compensation, such as commissions, are made on a recurring basis, whether the account is operated or managed by the employer, a third-party payroll processor, a depository institution, or any other person.

     “Prepaid debit account” means an account opened by or for the benefit of a consumer and owned by a consumer that contains account owner funds, to which the account owner or any other person may add funds and from which funds may be withdrawn by the account owner, and from which payments may be made by the account owner through use of an access device sold to a consumer in New Jersey.  A prepaid debit account shall not include:

     (1)   a demand deposit, savings deposit, or other asset account other than as described above;

     (2)   a payroll card account;

     (3)   an account established through a governmentally administered program;

     (4)   an account used for the express purpose of paying health care expenses;

     (5)   an account held pursuant to a bona fide trust agreement; or

     (6)   a prepaid telecommunications or technology card, rewards card, gift card, or gift certificate, as defined in section 1 of P.L.2002, c.14 (C.56:8-110).

     2.    a.  A financial institution shall provide a prepaid debit account owner with access to a monthly account statement that clearly sets forth for each electronic fund transfer during the month:

     (1)   the amount involved and the date of the transfer;

     (2)   the type of the transfer;

     (3)   the identity of the owner’s account with the financial institution from which or to which funds are transferred; and

     (4)   the identity of any third party to whom or from whom funds were transferred.

     b.    A financial institution shall not be subject to the requirements of subsection a. of this section if the financial institution makes available to the prepaid debit account owner:

     (1)   the account balance through a readily available phone line;

     (2)   90 days worth of electronic history that covers the past 90 days worth of account transactions; and

     (3)   if the account owner requests orally or in writing, the financial institution provides 90 days worth of account transactions.

     c.    A financial institution may not charge a fee for any service provided under subsection b. of this section, except that a financial institution may charge a fee of not more than $1 for each monthly written statement provided pursuant to paragraphs (2) or (3) of subsection b. of this section.

 

     3.    a.  In connection with a prepaid debit account, a financial institution shall not charge:

     (1)   an annual fee;

     (2)   an overdraft fee, including a fee for shortage or nonsufficient funds, or any other fee for a transaction processed for amounts exceeding the account balance;

     (3)   a usage fee for use at point of sale;

     (4)   a fee for a declined transaction;

     (5)   a fee for the use of an automated teller machine owned or operated by the issuer of the access device;

     (6)   a fee for a balance inquiry or access to transaction information through an automated teller machine owned or operated by the issuer of the access device;

     (7)   a fee for an inquiry to customer service, provided a fee may be charged after two inquiries during a monthly statement cycle;

     (8)   an account closing fee or a fee to obtain the remaining balance in the prepaid debit account, provided a fee may be charged for issuing a check for the account’s remaining balance;

     (9)   an activation, initiation, or enrollment fee; or

     (10) a fee for any activity not described in subsection b. of this section.

     b.    A financial institution may charge:

     (1)   a fee for a replacement access device, not to exceed $5 for each replacement access device;

     (2)   a fee for expedited delivery of a replacement access device;

     (3)   a periodic fee, not more frequently than monthly;

     (4)   a reload fee, or any other similar fee for depositing funds to the prepaid debit account, if the financial institution provides an alternate method for depositing funds to the prepaid debit account without a fee;

     (5)   a fee for a transfer from the prepaid debit account to another account;

     (6)   a fee for bill payment by check;

     (7)   a fee for a withdrawal by the account owner from an automated teller machine that is:

     (a)   located outside the United States; and

     (b)   not owned or operated by the issuer of the access device, including a fee to cover the costs of any charge to the financial institution by the owner or operator of the automated teller machine relating to the use of automated teller machine by the account owner;

     (8)   a fee for a purchase or a withdrawal of funds in a foreign currency;

     (9)   an inactivity or dormancy fee, provided that the fee is imposed only after one year of inactivity;

     (10) a fee to obtain the remaining balance in the prepaid debit account by check;

     (11) a fee for a returned deposit item or other similar fee in connection with depositing funds to a prepaid debit account;

     (12) a fee for adding an additional access device to a prepaid debit account; or

     (13) a fee for a withdrawal of funds from a prepaid debit account at a financial institution in a face-to-face transaction.

     c.    A financial institution shall provide to a consumer:

     (1)   together with any application, offer, or solicitation for a prepaid debit account, a table of any fees that may be charged in connection with the prepaid debit account.  This table of fees shall be in writing and shall:

     (a)   be conspicuously displayed to the consumer before purchase;

     (b)   be easily understood by the consumer; and

     (c)   include the amount and a description of each fee that may be charged by the financial institution; and

     (2)   on the access device, a toll-free telephone number and website at which the consumer may access a clear and easily understandable disclosure of the fees that may be charged in connection with the prepaid debit account.

 

     4.    Any person found to be in violation of this act shall be subject to a civil penalty of not more than $1,000 per day for each day that the person is in violation of this act, which penalty may be collected by summary proceedings instituted by the Commissioner of Banking and Insurance in accordance with the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).

 

     5.    The commissioner may promulgate, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations necessary to effectuate the purposes of this act.

 

     6.    This act shall take effect on the 120th day next following enactment.

 

 

STATEMENT

 

     This bill regulates prepaid debit accounts by limiting the fees that may be charged in connection with the accounts and requiring financial institutions holding prepaid debit accounts to disclose certain information to consumers.

     The bill requires financial institutions to provide a consumer whose funds are contained in a prepaid debit account with a monthly account statement that sets forth certain details for each electronic fund transfer during that month.  A financial institution is exempted from this requirement if it makes available to prepaid debt account owners the account balance through a readily available phone line, and 90 days worth of account transactions.

     The bill permits financial institutions to charge certain fees in connection with a prepaid debit account, which include:

     (1)   a fee for a replacement access device;

     (2)   a periodic fee, not more frequently than monthly;

     (3)   a reload fee;

     (4)   a transfer fee;

     (5)   a fee for bill payment by check;

     (6)   a fee for a withdrawal by the account owner from a foreign or out-of-network automated teller machine; and

     (7)   a fee for a purchase or a withdrawal in a foreign currency.

     The bill prohibits a financial institution from charging any fee in connection with a prepaid debit account except those fees expressly permitted by the bill.

     The bill also requires financial institutions to provide to a consumer a table of any fees that may be charged in connection with the prepaid debit account together with any application, offer, or solicitation for a prepaid debit account.  A financial institution must also provide a toll-free telephone number for customer service relating to the prepaid debit account, and, on the access device, a toll-free telephone number and website at which the consumer may access a clear and easily understandable disclosure of the fees that may be charged in connection with the prepaid debit account.

     Any person found to be in violation of the bill would be subject to a civil penalty of not more than $1,000 per day for each day that the person is in violation, which penalty may be collected by summary proceedings instituted by the Commissioner of Banking and Insurance.