ASSEMBLY, No. 2951

STATE OF NEW JERSEY

INTRODUCED MAY 12, 1997

By Assemblymen ZECKER and BLEE

An Act concerning certain electronic fund transfers.

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

    1. This act shall be known as and may be cited as the "Ethical ATM Act of 1997."

    2. The Legislature finds and declares:

    a. State and federally chartered financial institutions have put considerable emphasis on the use by customers of electronic terminals, including automated teller machines (ATMs), rather than carrying cash;

    b. Many of the largest financial institutions are trying to convince customers to use electronic terminals more frequently and to visit their branch offices less frequently, so branch offices can be closed and operating costs can be cut;

    c. Most financial institutions already charge a fee to some of their customers when they use an ATM owned by another financial institution or independent company;

    d. In addition, many financial institutions charge a noncustomer for using their ATMs.

    e. The networks, which make it possible for account holders to access their accounts whether using their own financial institution's ATMs or other ATMs wherever located, charge the financial institution which issues the access device every time its customers use an ATM, part of which charge the networks keep and part of which charge the networks send to the owner of the ATM used.

    f. In New Jersey ownership of ATMs is not restricted to financial institutions. Many of the ATMs in convenience stores and supermarkets are owned by corporations other than financial institutions which lease the space in these stores, use their own resources to provide moneys for any person wishing to withdraw money from their financial institution or credit card account and impose a charge for this service.

    3. As used in this act:

    "Access device" means a card, code, or other means of access to a consumer's account, or any combination thereof, that may be used by the consumer for the purpose of initiating electronic fund transfers.

    "Account" means a demand deposit, savings, or other consumer asset account held either directly or indirectly by a financial institution and established primarily for personal, family or household purposes.

    "Electronic fund transfer" means any transfer of funds, other than a transfer of funds originated by check, draft or other paper instrument, that is initiated through an electronic terminal, or computer or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit an account. The term includes, but is not limited to, point of sale transfers, automated teller machine transfers, direct deposits or withdrawals of funds. It includes all transfers resulting from debit card transactions, including those that do not involve an electronic terminal at the time of the transaction. The term does not include payments made by check, draft or similar paper instruments at an electronic terminal, or transfers initiated by use of a telephone.

    "Electronic terminal" means an electronic device, other than a telephone, operated by a consumer through which a consumer may initiate an electronic fund transfer. The term includes, but is not limited to, point-of-sale terminals, automated teller machines (ATMs), and cash dispensing machines.

    "Financial institution" means a state or federally chartered bank, savings bank, savings and loan association or credit union.

    "Third party" means a person who owns or operates an electronic terminal other than the financial institution holding a consumer's account.

    4. When an electronic fund transfer is initiated and completed by a consumer through the use of an electronic terminal owned by a third party, no fee may be imposed by that third party in connection with that transaction.

    5. This act shall take effect on the 30th day following enactment.

STATEMENT

    This bill prohibits the imposition of a fee by an owner of an electronic terminal which is used by the consumer to initiate and complete an electronic fund transfer if the owner of the electronic terminal is other than the financial institution holding the consumer's account.

Enacts the "Ethical ATM Act of 1997."