[First Reprint]

SENATE, No. 1078

STATE OF NEW JERSEY

INTRODUCED MAY 9, 1996

By Senators BRYANT and INVERSO

An Act concerning electronic funds transfers and supplementing Title 17 of the Revised Statutes.

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

    ¹1. As used in this act:

    "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. For the purposes of this act, "electronic fund transfer" also includes information provided to a consumer in response to an inquiry with respect to an account balance.

    "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, and cash dispensing machines.

    "Third party" means a person who owns or operates an electronic terminal other than the financial institution holding a consumer's account.¹

    ¹[1.] 2.¹ a. When an electronic fund transfer is initiated by a consumer through the use of an electronic terminal, ¹[including a telephone operated by the consumer,]¹ no fee may be imposed by ¹[any person] a third party¹ in connection with the transaction unless a notice is provided to the consumer, in accordance with subsection b. of this section, which clearly states the following:

    (1) that a fee will be imposed in connection with a completed transaction;

    (2) the amount of the fee;

    (3) that if the consumer does not elect to continue in the manner necessary to complete the transaction after receiving the notice concerning the imposition of a fee for a completed transaction, the consumer may cancel the transaction at that point by the appropriate method, which method shall be specified in the notice, without the imposition of a fee by any person, including ¹[any person described in paragraph (2) or (3) of subsection d. of this section, who would have been involved in the transaction if the transaction been completed] a third party¹;

    (4) that if the consumer elects to complete the transaction, upon completion of the transaction, the consumer will receive ¹, as part of the transaction record required pursuant to 12 C.F.R. §205.9(a),¹ a statement of the amount of the fee charged ¹, if any,¹ for the ¹[transaction, itemized by the source of the fee, if more than one source] electronic fund transfer as an item separate from the amount of the transaction¹.

    b. ¹[(1)]¹ The notice required pursuant to subsection a. of this section shall appear alone on the screen of the electronic terminal or on a paper notice issued from the machine ¹[or, in the case of an electronic fund transfer by a telephone, as a voice message clearly audible to the consumer]¹ after the transaction is initiated and before the consumer is irrevocably committed to completing the transaction.

    ¹[(2) The information regarding the amount of the fee charged for a completed transaction required pursuant to paragraph (4) of subsection a. of this section shall be provided to the consumer as part of the transaction record required pursuant to 12 C.F.R. §205.9(a) and shall also be included in the periodic statement provided to the consumer by the financial institution which is the issuer of the access device used by the consumer as an item separate from the amount of the transaction.]¹

    c. No fee may be imposed by ¹[any person] a third party¹ in connection with any electronic fund transfer initiated by a consumer for which a notice is required pursuant to subsection a. of this section, unless:

    (1) the consumer receives that notice in accordance with subsection b. of this section; ¹[and]¹

    (2) the consumer elects to complete the transaction, or otherwise responds in the manner necessary to effect the transaction, after receiving the notice ¹; and

    (3) the information regarding the amount of the fee charged for a completed transaction required pursuant to paragraph (4) of subsection a. of this section is provided to the consumer as part of the transaction record required pursuant to 12 C.F.R. §205.9(a)¹.

    d. The requirement of notice of fees under subsection a. and the prohibition on the imposition of fees under subsection c. of this section shall apply to any fee which is or would be imposed in connection with any electronic fund transfer to which those subsections apply by ¹[:

    (1) the person operating or owning the electronic terminal or telephone at which the transaction is initiated by the consumer;

    (2) the financial institution holding the account of the customer;

    (3) any national, regional, or local network utilized to effect the transaction; and

    (4) any other party involved in the electronic funds transfer] any third party involved in the electronic fund transfer¹.

    ¹e. The financial institution which is the issuer of the access device used by a consumer for electronic fund transfers and which provides a periodic statement to the consumer with respect to that consumer's accounts shall provide information on the periodic statement on each third party charge made in connection with the consumer's use of an electronic terminal for an electronic fund transfer as an item separate from the amount of the transaction, if any, and shall clearly identify the third party making the charge.¹

    ¹[2.] 3.¹ This act shall take effect immediately.

Requires certain information with respect to electronic fund transfers.