II 

109TH CONGRESS 

2D SESSION S. 3978 

To provide consumer protections for lost or stolen check cards and debit 

cards similar to those provided with respect to credit cards, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 28, 2006 

Mrs. CLINTON introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To provide consumer protections for lost or stolen check 

cards and debit cards similar to those provided with 

respect to credit cards, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Debit and Check Card 

5 Consumer Protection Act of 2006’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds that— 

8 (1) debit and check card use has experienced 

9 double digit growth for longer than a decade, and 


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1 more than 80 percent of American consumer house2 holds now posses a debit or check card; 

3 (2) between 2001 and 2003, consumers made 

4 42,500,000,000 transactions with debit cards, eclips5 ing credit card transactions by 2,300,000,000; 

(3) as of 2003, debit cards accounted for 1 6 ⁄3 of 

7 all purchases in stores; 

8 (4) in addition to the rise in debit and check 

9 card use, debit and check card fraud increasingly 

10 challenges American consumers; 

11 (5) in 2005, debit card and ATM fraud ac12 counted for losses of $2,750,000,000; 

13 (6) despite that growth, statutory debit and 

14 check card consumer liability protections remain 

15 substandard, as compared to credit cards; 

16 (7) the debit and check card industry has, in 

17 some instances, instituted liability protections that 

18 often exceed the requirements set forth under the 

19 provisions of law; and 

20 (8) the law should be changed to ensure a con21 tinued level of liability protection. 

22 SEC. 3. CAP ON DEBIT CARD LIABILITY. 

23 Section 909(a) of the Electronic Funds Transfer Act 

24 (15 U.S.C. 1693g(a)) is amended— 


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1 (1) by striking ‘‘Notwithstanding the foregoing’’ 

2 and all that follows through ‘‘whichever is less.’’; 

3 and 

4 (2) by striking ‘‘meana’’ and inserting 

5 ‘‘means’’. 

6 SEC. 4. DEBIT CARD ERROR RESOLUTION. 

7 Section 908(f) of the Electronic Funds Transfer Act 

8 (15 U.S.C. 1693f(f)) is amended— 

9 (1) by redesignating paragraphs (6) and (7) as 

10 paragraphs (7) and (8), respectively; and 

11 (2) by inserting after paragraph (5) the fol12 lowing: 

13 ‘‘(6) a charge for goods or services not accepted 

14 by the consumer or the designee thereof, or not de15 livered to the consumer or the designee thereof, in 

16 accordance with the agreement made at the time of 

17 a transaction;’’. 

18 SEC. 5. CONSUMER RIGHTS. 

19 Section 908 of the Electronic Funds Transfer Act 

20 (15 U.S.C. 1693f) is amended by adding at the end the 

21 following: 

22 ‘‘(g) RIGHTS OF CONSUMERS WITH RESPECT TO AC23 CEPTED CARDS.— 

24 ‘‘(1) IN GENERAL.—Subject to the limitation 

25 contained in paragraph (2), the issuer of an acceptVerDate Aug 31 2005 07:30 Sep 30, 2006 Jkt 049196 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3978.IS S3978

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1 ed card to a consumer shall be subject to all claims 

2 (other than tort claims) and defenses arising out of 

3 any transaction in which the accepted card is used 

4 as a method of payment, if— 

5 ‘‘(A) the consumer has made a good faith 

6 attempt to obtain satisfactory resolution of a 

7 disagreement or problem relative to the trans8 action from the person honoring the accepted 

9 card; 

10 ‘‘(B) the amount of the initial transaction 

11 exceeds $50; and 

12 ‘‘(C) the transaction was initiated by the 

13 consumer in the same State as the mailing ad14 dress previously provided by the consumer, or 

15 within 100 miles from such address, except that 

16 the limitations set forth in subparagraphs (A) 

17 and (B) with respect to the right of a consumer 

18 to assert claims and defenses against the issuer 

19 of the card shall not be applicable to any trans20 action in which the person honoring the accept21 ed card— 

22 ‘‘(i) is the same person as the card 

23 issuer; 

24 ‘‘(ii) is controlled by the card issuer; 


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1 ‘‘(iii) is under direct or indirect com2 mon control with the card issuer; 

3 ‘‘(iv) is a franchised dealer in the 

4 products or services of the card issuer; or 

5 ‘‘(v) has obtained the order for such 

6 transaction through a mail solicitation 

7 made by or participated in by the card 

8 issuer in which the cardholder is solicited 

9 to enter into such transaction by using the 

10 accepted card issued by the card issuer. 

11 ‘‘(2) LIMITATION.—The amount of claims or 

12 defenses asserted by the cardholder under this sub13 section may not exceed the amount paid by the card14 holder with respect to the subject transaction at the 

15 time at which the cardholder first notifies the card 

16 issuer or the person honoring the accepted card of 

17 such claim or defense.’’. 

18 SEC. 6. REGULATIONS. 

19 Not later than 90 days after the date of enactment 

20 of this Act, the Board of Governors of the Federal Reserve 

21 System shall issue final regulations to carry out the 

22 amendments made by this Act, which regulations shall be 

23 consistent, to the extent practicable, with regulations 


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1 issued to carry out similar provisions under the Truth in 

2 Lending Act. 

Æ 


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