cards, largely as replacements for debit cards which
could be used only with a personal identification
number at automated teller machines and a limited
number of retail establishments.
(2) According to industry analysts, as many as
1,300,000 new debit cards which can be used like
credit cards are issued each month.
(3) If current trends continue, debit cards that
can be used like credit cards will soon rival the pop-
ularity of credit cards and some banking experts
predict that more than 2⁄3 of the households in the
United States will have such a card by the year
2000.
(4) Many times, debit cards that can be used
like credit cards have been issued without providing
adequate disclosure that—
(A) the card may be used to initiate an
electronic fund transfer without the use of a
personal identification number or similar code
or means of access; and
(B) even though the card may carry a logo
associated with credit cards, the card is not a
credit card and the consumer may bear a sig-
nificantly larger liability for an unauthorized
transaction involving such debit card than
would be the case for a similar unauthorized
transaction involving a credit card.
(5) Thus, millions of Americans are—
(A) receiving cards in a form they didn’t
request; and
(B) are carrying such cards around with
them—
(i) without realizing that the cards
have an expanded capability without the
protections against unauthorized transfers
which are typical of cards issued to make
cash withdrawals from automated teller
machines; and
(ii) without fully appreciating the
risks associated with such cards.
(6) Economic stimulation would be enhanced
and competition among the various financial institu-
tions and other companies which issue debit cards
would be strengthened by the informed use of debit
cards by consumers.
SEC. 3. DEFINITIONS.
Section 903 of the Electronic Fund Transfer Act (15
U.S.C. 1693a) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(10);
(2) by striking the period at the end of para-
graph (11) and inserting a semicolon; and
(3) by adding at the end the following new
paragraphs:
‘‘(12) ATM CARD.—The term ‘ATM card’
means any card issued by a financial institution for
use in initiating electronic fund transfers at auto-
mated teller machines and other electronic terminals
which requires a code or other unique form of identi-
fication (other than a signature) in order to access
the account of the consumer; and
‘‘(13) CHECK
CARD.—The term ‘check card’
means any card issued by a financial institution for
use in initiating electronic fund transfers from the
account of a consumer which does not require the
protection of a code or other means of access that
uniquely identifies the consumer (and for purposes
of this paragraph, a signature shall not be treated
as a means of access which uniquely identifies the
consumer).’’.
SEC. 4. CHECK CARD REQUIREMENT.
Section 911 of the Electronic Fund Transfer Act (15
U.S.C. 1693i) is amended by adding at the end the follow-
ing new subsection:
‘‘(e) CHECK CARD REQUIREMENT.—Any check card
issued by any financial institution to any consumer shall
bear the legend ‘Check Card’ in a prominent typeface and
in a conspicuous place on the face of the check card.’’.
SEC. 5. DUAL-USE DEBIT CARD.
(a) CONSUMER LIABILITY.—
(1) IN
GENERAL.—Section 909 of the Elec-
tronic Fund Transfer Act (15 U.S.C. 1693g) is
amended—
(A) 
by 
redesignating 
subsections 
(b)
through (e) as subsections (d) through (g), re-
spectively;
(B) in subsection (a)—
(i) by redesignating paragraphs (1)
and (2) as subparagraphs (A) and (B), re-
spectively, and indenting appropriately;
(ii) by inserting ‘‘CARDS NECESSITAT-
ING UNIQUE IDENTIFIER.—
‘‘(1) IN GENERAL.—’’ after ‘‘(a)’’;
(iii) by striking ‘‘other means of ac-
cess can be identified as the person author-
ized to use it, such as by signature, photo-
graph,’’ and inserting ‘‘other means of ac-
cess can be identified as the person author-
ized to use it by a unique identifier, such
as a photograph, retina scan,’’; and
(iv) by striking ‘‘Notwithstanding the
foregoing,’’ and inserting the following:
‘‘(2) NOTIFICATION.—Notwithstanding para-
graph (1),’’; and
(C) by inserting before subsection (d), as
so designated by this section, the following new
subsections:
‘‘(b) CARDS NOT NECESSITATING UNIQUE IDENTI-
FIER.—A consumer shall be liable for an unauthorized
electronic fund transfer only if—
‘‘(1) the liability is not in excess of $50;
‘‘(2) the unauthorized electronic fund transfer
is initiated by the use of a card that has been prop-
erly issued to a consumer other than the person
making the unauthorized transfer as a means of ac-
cess to the account of that consumer for the purpose
of initiating an electronic fund transfer;
‘‘(3) the unauthorized electronic fund transfer
occurs before the card issuer has been notified that
an unauthorized use of the card has occurred or may
occur as the result of loss, theft, or otherwise; and
‘‘(4) such unauthorized electronic fund transfer
did not require the use of a code or other unique
identifier (other than a signature), such as a photo-
graph, fingerprint, or retina scan.
‘‘(c) NOTICE OF LIABILITY AND RESPONSIBILITY TO
REPORT LOSS OF CARD, CODE, OR OTHER MEANS OF AC-
CESS.—No consumer shall be liable under this title for any
unauthorized electronic fund transfer unless the consumer
has received in a timely manner the notice required under
section 905(a)(1), and any subsequent notice required
under section 905(b) with regard to any change in the
information which is the subject of the notice required
under section 905(a)(1).’’.
(2) 
CONFORMING
AMENDMENT.—Section
905(a)(1) of the Electronic Fund Transfer Act (15
U.S.C. 1693c(a)(1)) is amended to read as follows:
‘‘(1) the liability of the consumer for any unau-
thorized electronic fund transfer and the require-
ment for promptly reporting any loss, theft, or unau-
thorized use of a card, code, or other means of ac-
cess in order to limit the liability of the consumer
for any such unauthorized transfer;’’.
(b) VALIDATION
REQUIREMENT
FOR
DUAL-USE
DEBIT CARDS.—
(1) IN
GENERAL.—Section 911 of the Elec-
tronic Fund Transfer Act (15 U.S.C. 1693i) is
amended—
(as added by section 4 of this Act) the following new sub-
section:
‘‘(f) PREFERENCE OF CONSUMER.—
‘‘(1) IN GENERAL.—If—
‘‘(A) in response to a request or applica-
tion by a consumer for an ATM card, a finan-
cial institution issues a check card; and
‘‘(B) the consumer refuses to accept a
check card,
the issuer shall promptly issue such consumer an
ATM card.
‘‘(2) DEFINITIONS.—For purposes of paragraph
(1), the following definitions shall apply:
SEC. 7. TOLL-FREE TELEPHONE NUMBER FOR REPORTING
LOST OR STOLEN CHECK CARDS OR UNAU-
THORIZED WITHDRAWALS.
(a) IN GENERAL.—Section 906 of the Electronic
Fund Transfer Act (15 U.S.C. 1693d) is amended by add-
ing at the end the following new subsection:
‘‘(g) 24-HOUR, TOLL-FREE, NOTIFICATION SYS-
TEM.—A financial institution which issues a check card
to any consumer shall establish and maintain a 24-hour
notification system, including a toll-free telephone number
at which personnel are continuously accessible, which per-
mits the consumer to immediately report the loss or theft
of the check card or any unauthorized use or suspected
unauthorized use of the card.’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—
Section 906(c)(4) of the Electronic Fund Transfer Act (15
U.S.C. 1693d(c)(4)) is amended by inserting after the pe-
riod at the end the following new sentence: ‘‘In the case
of a periodic statement for an account from which with-
drawals may be initiated by a check card (as defined in
subsection (g)(2)), the notice required under this para-
graph shall appear in a conspicuous and prominent loca-
tion on the periodic statement under a heading indicating
that the telephone number is a 24-hour, toll-free telephone
number and the notice shall inform the consumer of the
importance of promptly reporting any loss or theft of such
card or any unauthorized use or suspected unauthorized
use of the card.’’.
SEC. 8. PROHIBITION ON FEES FOR INSUFFICIENT FUNDS
IN CASE OF CERTAIN UNAUTHORIZED TRANS-
FERS.
Section 909 of the Electronic Fund Transfer Act (15
U.S.C. 1693g) is amended by adding at the end the follow-
ing new subsection:
‘‘(h) PROHIBITION ON CERTAIN FEES.—
‘‘(1) IN GENERAL.—A consumer shall not be
liable for any fee imposed by a financial institution
for insufficient funds in the account of the consumer
if the lack of sufficient funds in such account is due
to an unauthorized electronic fund transfer (from
such account) initiated by the use of a card without
the protection of a code or other means of access
which uniquely identifies the consumer.
‘‘(2) PROMPT
RECREDIT
OF
PRIOR
FEES.—
Upon receiving notice from a consumer of an alleged
unauthorized transaction, a financial institution
shall promptly credit the account of a consumer for
any fee described in paragraph (1) which was im-
posed before such notice was received.’’.
SEC. 
9. 
PROVISIONAL 
RECREDIT 
OF 
UNAUTHORIZED
TRANSFERS AFTER 5 BUSINESS DAYS.
Section 908(c) of the Electronic Fund Transfer Act
(15 U.S.C. 1693f(c)) is amended by striking ‘‘ten business
days’’ and inserting ‘‘5 business days’’.
SEC. 10. EFFECTIVE DATE.
The amendments made by this Act shall apply after
the end of the 1-year period beginning on the date of the
enactment of this Act.
Æ