SENATE, No. 726

STATE OF NEW JERSEY

INTRODUCED FEBRUARY 15, 1996

By Senator MARTIN

An Act prohibiting the recording of certain information on checks under certain conditions and amending P.L.1991, c.281.

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

    1. Section 1 of P.L.1991, c.281 (C.56:11-20) is amended to read as follows:

    1. As used in this act:

    "Charge card" means a credit card on an account for which no periodic rate is used to compute a finance charge.

    "Check" means a demand draft drawn on or payable through an office of a depository institution located in the United States that has imprinted on it the account holder's name and the depository institution's name, location and routing number.

    "Consumer" means a natural person.

    "Consumer transaction" means the sale of goods, services or anything of value to a consumer, primarily for personal, family or household purposes[, but does not include the cashing of a check by a depository institution].

    "Credit card" means any card, plate, coupon book, or other single credit device that may be used from time to time to obtain credit.

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

(cf: P.L.1991, c.281, s.1)

    2. Section 2 of P.L.1991, c.281 (C.56:11-21) is amended to read as follows:

    2. a. No person who receives a check in payment of an obligation resulting from a consumer transaction or who cashes a check for a consumer and which as a condition of such acceptance or the cashing of a check requires that the check drawer provide a credit card or charge card, shall record on the check or elsewhere, the card account number. Nothing in this section shall be construed to prohibit any person, as a condition for the acceptance of a check in payment for a consumer transaction or the cashing of a check for a consumer from doing either or both of the following:

    (1) Requesting a consumer to display a credit card or charge card as a means of identification, or as an indication of credit worthiness or financial responsibility;

    (2) Recording on the check the type of credit card or charge card so displayed and the credit card or charge card expiration date.

    b. Nothing in this section shall:

    (1) Require any person to accept a check in payment for a consumer transaction or to cash a check for a consumer regardless of whether a credit card or charge card is displayed; or

    (2) Prohibit a person from recording a credit card number and expiration date on a check as the condition for cashing or accepting that check where that person has agreed with the card issuer to cash or accept checks from the issuer's cardholders and where the issuer guarantees those cardholders' checks.

(cf: P.L.1991, c.281, s.2)

    3. This act shall take effect immediately.

STATEMENT

    This bill prohibits a person, including a depository institution, which cashes a check for a consumer from recording a charge card or credit card account number on the check. It does not prohibit a person, as a condition for cashing a check, from requiring a customer to show a credit card or charge card and recording the type of card shown and the expiration date of the card. Under the bill a person, including a depository institution, is not required to cash a check for a consumer.

Prohibits recording of certain information on checks as a condition for cashing the checks.