,,ii #aacth ,,congress #ast ,session ,s4 #ahfg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #ai1 #bjac,mr4 ,menendez 7for himself and ,mr4 ,blumenthal7 introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,a ,,bill ,to provide protection for consumers who have prepaid cards1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,prepaid ,card ,consumer ,protection ,act of #bjac4 #b4 ,definitions 7a7 ,definition of account ,section #ijc of the ,electronic ,fund ,transfer ,act 7#ae ,u4,s4,c4 #afic;a7 is amended by striking paragraph 7#b7 and inserting the following3 7#b7 the term account-- 7,a7 means-- 7i7 a demand deposit1 savings deposit1 or other asset account 7other than an occasional or incidental credit balance in an open end credit plan1 as defined in section #ajc7;j771 as described in regulations of the ,bureau1 established primarily for personal1 family1 or household purposes1 as defined by the ,bureau1 by rule2 and 7ii7 a spending account1 as defined in section #ibd7;a72 and 7,b7 does not include an account held by a financial institution pursuant to a bona fide trust agreement2 4 7b7 ,definition of financial institution ,section #ijc7i7 of the ,electronic ,fund ,transfer ,act 7#ae ,u4,s4,c4 #afic;a7#i77 is amended by striking holds an account and inserting manages1 provides1 or holds an account containing funds4 7c7 ,technical and conforming amendments ,section #ijc of the ,electronic ,fund ,transfer ,act 7#ae ,u4,s4,c4 #afic;a7 is amended-- 7#a7 by redesignating paragraph 7#d7 7relating to the ,board of ,governors of the ,federal ,reserve ,system71 as so designated by section #ajhd7b77;,a7 of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7,public ,law #aaa-bjc2 #abd ,stat4 #bjha71 as paragraph 7#c72 and 7#b7 in paragraph 7#c71 as so redesignated1 by striking term ,bureau means the ,bureau of ,governors and inserting term ,board means the ,board of ,governors4 #c4 ,spending accounts 7a7 ,spending accounts ,the ,electronic ,fund ,transfer ,act 7#ae ,u4,s4,c4 #afic et seq47 is amended-- 7#a7 by redesignating section #ibc 7#ae ,u4,s4,c4 #afic note71 relating to the effective date of the ,electronic ,fund ,transfer ,act1 as so designated by section #ajgc of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7,public ,law #aaa-bjc2 #abd ,stat4 #bjfj71 as section #ibe2 7#b7 by redesignating section #ibb 7#ae ,u4,s4,c4 #aficr71 relating to exemptions for ,state regulation1 as so designated by section #ajgc of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7,public ,law #aaa-bjc2 #abd ,stat4 #bjfj71 as section #ibc2 and 7#c7 by inserting after section #ibc1 as so redesignated1 the following3 #ibd4 ,spending accounts 7a7 ,definitions ,for purposes of this section-- 7#a7 the term insured credit union has the same meaning as in section #aja of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #ageb72 7#b7 the term insured depository institution has the same meaning as in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac72 and 7#c7 the term spending account-- 7,a7 means a deposit account-- 7i7 that is established by a consumer or on behalf of a consumer at an insured depository institution or an insured credit union2 7ii7 that contains the funds of a consumer2 7iii7 to which payments are to be made by a consumer1 or at the direction of a consumer2 7iv7 to which recurring electronic fund transfers may be made1 at the direction of a consumer2 or 7v7 from which payments may be made at the direction of a consumer through the use of a card1 code1 or device2 7,b7 includes a deposit account described in subparagraph 7,a7-- 7i7 that is operated or managed by a financial institution1 or any other person2 and 7ii7 the funds of which are-- 7,i7 pooled with the funds of a person other than the person who established the account2 or 7,,ii7 held in a name other than that of the person who established the account2 and 7,c7 does not include-- 7i7 an account described in section #ijc7b77;,a77i72 7ii7 an account held by a financial institution pursuant to a bona fide trust agreement2 7iii7 a nonreloadable1 general-use prepaid card1 as defined in section #iae7;a77#b77;,a71 in an amount that does not exceed #bej2 7iv7 a general-use prepaid card1 as defined in section #iae7;a77#b77;,a71 that is solely associated with-- 7,i7 a health plan to which section #aje of the ,internal ,revenue ,code of #aihf applies2 7,,ii7 a qualified transportation fringe1 as defined in section #acb7;f7 of the ,internal ,revenue ,code of #aihf2 7,,iii7 a health savings account1 as defined in section #bbc7;d7 of the ,internal ,revenue ,code of #aihf2 or 7,,iv7 any other healthcare benefit account1 including a healthcare account relating to ,medicare or ,medicaid benefits2 7v7 a gift certificate1 as defined in section #iae7;a77#b77;,b72 7vi7 a store gift card1 as defined in section #iae7;a77#b77;,c72 7vii7 an electronic promise1 plastic card1 or payment code or device described in clause 7i71 7v71 or 7vi7 of section #iae7;a77#b77;,d72 7viii7 a nonreloadable card labeled as a gift card and marketed solely as a gift card2 or 7ix7 a nonreloadable loyalty1 rebate1 or promotional card4 7b7 ,,fdic or ,,ncua insurance 7#a7 ,insurance required ,spending accounts shall be structured to provide and maintain separate deposit insurance coverage for the funds of each consumer under the applicable regulations of the ,federal ,deposit ,insurance ,corporation or the ,national ,credit ,union ,administration4 7#b7 ,transfer of funds ,any person that receives funds in connection with an electronic fund transfer to a spending account shall promptly1 and in no event later than #a business day after the funds are activated-- 7,a7 transfer such funds to an account at an insured depository institution or an insured credit union1 as applicable2 and 7,b7 credit the spending account in an amount equal to the amount of such funds4 7c7 ,alternative to periodic statement 7#a7 ,periodic statement not required ,in the case of an electronic fund transfer from a spending account1 a financial institution shall not be subject to the requirement under section #ijf7;c7 to provide a periodic statement to a consumer1 if the financial institution provides to the consumer-- 7,a7 access to the account balance of the consumer-- 7i7 through a readily available telephone line2 7ii7 through the ,internet2 7iii7 at an electronic terminal or other device that allows the consumer to make a balance inquiry1 by providing balance information or1 routinely or upon request1 on a receipt provided at the electronic terminal at the time of an electronic fund transfer2 and 7iv7 through text messaging2 7,b7 notice of the means by which the consumer may access the account balance of the consumer1 including any telephone number2 7,c7 in response to an oral or written request of the consumer1 a written record of the account transactions of the consumer during the #b-year period ending on the date of the request that includes the information required to be provided to the consumer under section #ijf7;c72 7,d7 an electronic record1 such as a record available on the ,internet1 of the account transactions of the consumer during the #b-year period ending on the date on which the consumer accesses the electronic record that includes the information required to be provided to the consumer under section #ijf7;c72 7,e7 with at least the same frequency as a written periodic statement that would otherwise be required under section #ijf1 notification by email of the availability of an electronic history or an electronic periodic statement1 unless the consumer has declined to provide an email address2 7,f7 the option to receive a written statement1 either a one-time paper statement or continuous regular monthly paper statements with a single request1 and clear and conspicuous notice of such option at the time of enrollment and on the website of the financial institution2 7,g7 annual notice of the error resolution procedure for the spending account1 as prescribed in regulations of the ,bureau2 and 7,h7 any other transaction information that the financial institution elects to make available and that the consumer elects to receive1 such as messages or alerts concerning other balance or transaction information4 7#b7 ,fees prohibited 7,a7 ,in general ,except as provided in subparagraph 7,b71 a financial institution may not charge a fee for any service provided under paragraph 7#a74 7,b7 ,fee for written statement ,a financial institution may charge a fee of not more than #a for each written statement provided under paragraph 7#a77;,f74 7#c7 ,no election by consumer ,if the consumer has not elected to receive written periodic or annual statements1 has not elected to receive another regular form of transaction information that the ,bureau has determined1 by rule1 to be equivalent to periodic statements1 and has not accessed the account online in the preceding #ab-month period1 the financial institution shall provide notice to the consumer at least annually of the means by which the consumer may access transaction information and the option to enroll in written periodic or annual statements4 7d7 ,limitations on liability ,for purposes of section #iji7;a71 reimbursement need not be made to a consumer for a loss relating to a spending account that a financial institution establishes would not have occurred1 but for the failure of the consumer to report any unauthorized electronic fund transfer or account error-- 7#a7 not later than #fj days after the date on which account information that includes the unauthorized electronic fund transfer or account error is provided to or accessed by the consumer under subsection 7c72 or 7#b7 in extenuating circumstances1 such as extended travel or hospitalization1 within a longer time that is reasonable under the circumstances4 7e7 ,fees 7#a7 ,fees prohibited ,except as provided in paragraph 7#b71 a financial institution may not charge in connection with a spending account-- 7,a7 an annual fee2 7,b7 an overdraft fee1 including a fee for shortage or nonsufficient funds1 or any other fee for a transaction processed for amounts exceeding the account balance2 7,c7 a usage fee for use at the point of sale2 7,d7 a fee for a declined transaction2 7,e7 a fee for the use of an electronic terminal that is in the network of the issuer2 7,f7 any fee during periods of inactivity or dormancy1 including a periodic fee charged after more than #f months of inactivity2 7,g7 a fee for a balance inquiry or access to transaction information2 7,h7 a fee for an inquiry to customer service2 7,i7 a finance charge or other fee imposed in connection with an extension of credit2 7,j7 an account closing fee or a fee to obtain the remaining balance in the spending account2 7,k7 a fee for any activity not described in paragraph 7#b72 7,l7 any fee prohibited by applicable ,state law2 or 7,m7 any fee of any kind that would cause the balance to become negative4 7#b7 ,fees permitted ,a financial institution may charge in connection with a spending account-- 7,a7 a fee for a replacement card-- 7i7 of not more than #e for the first replacement card requested by a consumer during any #ab-month period2 and 7ii7 that is in addition to the replacement card described in clause 7i72 7,b7 a fee for expedited delivery of a replacement card2 7,c7 a periodic fee1 not more frequently than monthly1 provided that no periodic fee may be assessed if there has been no deposit or transaction activity in the account during the preceding #c months2 7,d7 a reload fee1 or any other fee for adding value to the spending account1 if the financial institution provides a reasonable alternate method for adding value to the spending account without a fee2 7,e7 a fee for a transfer from the spending account to another account2 7,f7 a fee for bill payment2 7,g7 a fee for a withdrawal by the consumer from an electronic terminal that is-- 7i7 located outside the ,united ,states2 or 7ii7 not in the network of the financial institution1 including a fee to cover the costs of any charge to the financial institution by the owner of the electronic terminal relating to the use of the electronic terminal by the consumer2 7,h7 a fee for a purchase or a withdrawal in a foreign currency2 and 7,i7 an activation1 initiation1 or enrollment fee4 7#c7 ,disclosure of fee information 7,a7 ,disclosure required ,each financial institution that offers a spending account shall provide to a consumer-- 7i7 together with any application1 offer1 or solicitation for a spending account-- 7,i7 a table of any fees that may be charged in connection with the spending account that-- 7aa7 can be easily understood by the consumer2 7bb7 is clearly and conspicuously displayed to the consumer before purchase2 and 7cc7 includes1 at a minimum1 the amount and a description of each fee that may be charged by the financial institution under paragraph 7#b72 and 7,,ii7 an estimate of the average total monthly cost to a typical consumer for using the spending account1 based on a profile of the typical consumer established by the ,bureau2 7ii7 on the card or other means of access1 a toll-free telephone number and website at which the consumer may access a clear and conspicuous disclosure of the fees that may be charged in connection with the spending account2 and 7iii7 a wallet-sized summary of any fees that may be charged in connection with the spending account and a toll-free telephone number for customer service relating to the spending account4 7,b7 ,rules ,not later than #a year after the date of enactment of the ,prepaid ,card ,consumer ,protection ,act of #bjac1 the ,bureau shall establish1 by rule1 the headings1 content1 and format of the fee table1 estimate1 and wallet-sized fee summary required under subparagraph 7,a74 7f7 ,credit features 7#a7 ,in general ,no person may offer or provide a spending account that has a credit feature or that can be linked to a credit account that is automatically repaid from the spending account4 7#b7 ,exceptions ,nothing in this subsection prohibits-- 7,a7 a consumer from making an electronic fund transfer from a spending account to pay a credit account or from setting up preauthorized electronic fund transfers to pay a credit account2 or 7,b7 a financial institution from offsetting an inadvertent negative balance in a spending account against the next deposit to that account1 provided that the consumer is not charged a fee or finance charge4 7g7 ,closure of dormant accounts ,a financial institution or other person that provides1 holds1 or manages a spending account shall close the account and refund any remaining funds to the consumer-- 7#a7 if the account has been inactive for #ab months1 or such other period as the ,bureau shall establish1 by regulation2 and 7#b7 upon request of the consumer to the financial institution or other person using an easily accessible method of contact1 that the account be closed4 4 7b7 ,consumer choice ,section #iac of the ,electronic ,fund ,transfer ,act 7#ae ,u4,s4,c4 #afick7 is amended-- 7#a7 by striking ,no person may-- and inserting the following3 7a7 ,in general ,no person may-- 2 7#b7 in paragraph 7#a71 by striking or at the end2 7#c7 in paragraph 7#b71 by striking the period and inserting 2 or2 7#d7 by inserting after paragraph 7#b7 the following3 7#c7 issue a card or other means of access for receipt of electronic fund transfers of wages or government benefits unless the recipient has first been offered the option of receiving the funds in a form selected by the recipient from among a set of options specified by the ,bureau4 2 and 7#e7 by adding at the end the following3 7b7 ,forms of receipt ,the options for forms of receipt of electronic fund transfers of wages or government benefits under subsection 7a77#c7 specified by the ,bureau shall include at least #a of the following forms3 7#a7 direct deposit into an account designated by the recipient2 7#b7 in cash2 and 7#c7 by check4 4 7c7 ,study ,the ,bureau shall establish an implementation plan and timeline for a prepaid card research study to be completed not later than #a year after the date of enactment of this ,act1 to determine what1 if any1 differences there are for both the short- and long-term economic well being of consumers at different income levels who use spending accounts versus those who use traditional bank accounts for their primary means of making financial transactions4 7d7 ,technical and conforming amendments 7#a7 ,written periodic statements ,section #ijf7;c7 of the ,electronic ,fund ,transfer ,act 7#ae ,u4,s4,c4 #afic;d7c77 is amended in the first sentence of the matter preceding paragraph 7#a71 by striking ,a financial and inserting ,except as provided in section #ibd7;c71 a financial4 7#b7 ,error resolution ,section #ijh7;a7 of the ,electronic ,fund ,transfer ,act 7#ae ,u4,s4,c4 #afic;f7a77 is amended by striking or notification pursuant to section #ijf7;b7 and inserting 1 notification pursuant to section #ijf7;b71 or written or electronic documentation pursuant to section #ibd7;c74 #d4 ,severability ,if any provision of this ,act or an amendment made by this ,act1 or the application of the provision or amendment to any person or circumstance1 is held to be unconstitutional1 the remainder of this ,act and the amendments made by this ,act1 and the application of the provisions of this ,act and the amendments made by this ,act to any other person or circumstance1 shall not be affected4 #e4 ,effective date ,this ,act and the amendments made by this ,act shall become effective #i months after the date of enactment of this ,act4