S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5185
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 26, 2021
                                ___________
 
 Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Consumer Protection
 
 AN ACT to amend the general business law, in relation  to  limiting  the
   liability of a debit cardholder for unauthorized use of a debit card

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 512 of the general  business  law,  as  amended  by
 chapter 556 of the laws of 1987, is amended to read as follows:
   §  512.  Limitation of liability for unauthorized use of a credit card
 or a debit card. 1. A provision which imposes liability  upon  a  holder
 for  a  cash advance or loan or for the purchase or lease of property or
 services obtained by the unauthorized use of a credit card  or  a  debit
 card  shall  not  be enforceable to the extent that it imposes a greater
 liability upon the holder than is imposed upon the holder  of  a  credit
 card  under  the  provisions  of  the act of congress entitled "Truth in
 Lending Act" and the regulations thereunder, as such act and regulations
 may from time to time be amended.
   2. (A) A CARDHOLDER SHALL BE LIABLE FOR  THE  UNAUTHORIZED  USE  OF  A
 DEBIT CARD ONLY IF:
   (1)  THE  CARD  IS A DEBIT CARD WHICH THE CARDHOLDER HAS REQUESTED AND
 RECEIVED OR HAS SIGNED OR HAS USED, OR AUTHORIZED ANOTHER  TO  USE,  FOR
 THE PURPOSE OF OBTAINING MONEY, PROPERTY, LABOR, OR SERVICES;
   (2) THE LIABILITY IS NOT IN EXCESS OF FIFTY DOLLARS;
   (3)  THE  CARD  ISSUER  GIVES ADEQUATE NOTICE TO THE CARDHOLDER OF THE
 POTENTIAL LIABILITY;
   (4) THE CARD ISSUER HAS PROVIDED THE CARDHOLDER WITH A DESCRIPTION  OF
 A MEANS BY WHICH THE CARD ISSUER MAY BE NOTIFIED OF LOSS OR THEFT OF THE
 CARD,  WHICH  DESCRIPTION MAY BE PROVIDED ON THE FACE OR REVERSE SIDE OF
 EACH MONTHLY, QUARTERLY OR OTHER PERIODIC ACCOUNT  STATEMENT  ISSUED  TO
 THE  CARDHOLDER  BY  THE  CARD  ISSUER,  AS APPLICABLE, OR ON A SEPARATE
 NOTICE ACCOMPANYING SUCH STATEMENT;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD05094-01-1

 S. 5185                             2
 
   (5) THE UNAUTHORIZED USE OCCURS BEFORE THE CARD ISSUER HAS BEEN  NOTI-
 FIED  THAT  AN  UNAUTHORIZED  USE  OF THE DEBIT CARD HAS OCCURRED OR MAY
 OCCUR AS THE RESULT OF LOSS, THEFT, OR OTHERWISE; AND
   (6)  THE  CARD  ISSUER  HAS PROVIDED A METHOD WHEREBY THE USER OF SUCH
 CARD CAN BE IDENTIFIED AS THE PERSON AUTHORIZED TO USE IT.
   (B) FOR PURPOSES OF THIS SECTION, A CARD ISSUER HAS BEEN NOTIFIED WHEN
 SUCH STEPS AS MAY BE REASONABLY REQUIRED IN THE ORDINARY COURSE OF BUSI-
 NESS TO PROVIDE THE CARD ISSUER WITH THE PERTINENT INFORMATION HAVE BEEN
 TAKEN, WHETHER OR NOT ANY PARTICULAR OFFICER, EMPLOYEE, OR AGENT OF  THE
 CARD ISSUER DOES IN FACT RECEIVE SUCH INFORMATION.
   (C) IN ANY ACTION BY A CARD ISSUER TO ENFORCE LIABILITY FOR THE USE OF
 A  DEBIT  CARD, THE BURDEN OF PROOF IS UPON THE CARD ISSUER TO SHOW THAT
 THE USE WAS AUTHORIZED OR, IF THE USE WAS UNAUTHORIZED, THEN THE  BURDEN
 OF  PROOF IS UPON THE CARD ISSUER TO SHOW THAT THE CONDITIONS OF LIABIL-
 ITY FOR THE UNAUTHORIZED USE OF A DEBIT CARD, AS SET FORTH IN  PARAGRAPH
 (A) OF THIS SUBDIVISION, HAVE BEEN MET.
   (D)  NOTHING  IN  THIS SUBDIVISION IMPOSES LIABILITY UPON A CARDHOLDER
 FOR THE UNAUTHORIZED USE OF A DEBIT CARD IN EXCESS OF HIS OR HER LIABIL-
 ITY FOR SUCH USE UNDER OTHER APPLICABLE LAW OR UNDER ANY AGREEMENT  WITH
 THE CARD ISSUER.
   (E)  EXCEPT  AS  PROVIDED  IN THIS SUBDIVISION, A CARDHOLDER SHALL NOT
 INCUR ANY LIABILITY FROM THE UNAUTHORIZED USE OF A DEBIT CARD.
   § 2. This act shall take effect on the ninetieth day  after  it  shall
 have  become  a law and shall apply to all transactions occurring on and
 after such effective date.