15 U.S.C. § 1693h — Liability of financial institutions

Page 1652 TITLE 15—COMMERCE AND TRADE § 1693h 1 So in original. Probably should be ‘‘financial’’. Editorial Notes REFERENCES IN TEXT Section 1602(e) of this title, referred to in subsec. (c), was redesignated section 1602(f) of this title by Pub. L. 111–203, title X, § 1100A(1)(A), July 21, 2010, 124 Stat. 2107. § 1693h. Liability of financial institutions (a) Action or failure to act proximately causing damages Subject to subsections (b) and (c), a financial institution shall be liable to a consumer for all damages proximately caused by— (1) the financial institution’s failure to make an electronic fund transfer, in accord- ance with the terms and conditions of an ac- count, in the correct amount or in a timely manner when properly instructed to do so by the consumer, except where— (A) the consumer’s account has insuffi- cient funds; (B) the funds are subject to legal process or other encumbrance restricting such trans- fer; (C) such transfer would exceed an estab- lished credit limit; (D) an electronic terminal has insufficient cash to complete the transaction; or (E) as otherwise provided in regulations of the Bureau; (2) the financial institution’s failure to make an electronic fund transfer due to insuf- ficient funds when the financal 1 institution failed to credit, in accordance with the terms and conditions of an account, a deposit of funds to the consumer’s account which would have provided sufficient funds to make the transfer, and (3) the financial institution’s failure to stop payment of a preauthorized transfer from a consumer’s account when instructed to do so in accordance with the terms and conditions of the account. (b) Acts of God and technical malfunctions A financial institution shall not be liable under subsection (a)(1) or (2) if the financial in- stitution shows by a preponderance of the evi- dence that its action or failure to act resulted from— (1) an act of God or other circumstance be- yond its control, that it exercised reasonable care to prevent such an occurrence, and that it exercised such diligence as the circumstances required; or (2) a technical malfunction which was known to the consumer at the time he at- tempted to initiate an electronic fund transfer or, in the case of a preauthorized transfer, at the time such transfer should have occurred. (c) Intent In the case of a failure described in subsection (a) which was not intentional and which resulted from a bona fide error, notwithstanding the maintenance of procedures reasonably adapted to avoid any such error, the financial institution shall be liable for actual damages proved. (d) Exception for damaged notices If the notice required to be posted pursuant to section 1693b(d)(3)(B)(i) of this title by an auto- mated teller machine operator has been posted by such operator in compliance with such sec- tion and the notice is subsequently removed, damaged, or altered by any person other than the operator of the automated teller machine, the operator shall have no liability under this section for failure to comply with section 1693b(d)(3)(B)(i) of this title. (Pub. L. 90–321, title IX, § 910, as added Pub. L. 95–630, title XX, § 2001, Nov. 10, 1978, 92 Stat. 3735; amended Pub. L. 106–102, title VII, § 705, Nov. 12, 1999, 113 Stat. 1465; Pub. L. 111–203, title X, § 1084(1), July 21, 2010, 124 Stat. 2081.) Editorial Notes AMENDMENTS 2010—Subsec. (a)(1)(E). Pub. L. 111–203 substituted ‘‘Bureau’’ for ‘‘Board’’. 1999—Subsec. (d). Pub. L. 106–102 added subsec. (d). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the des- ignated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. § 1693i. Issuance of cards or other means of ac- cess (a) Prohibition; proper issuance No person may issue to a consumer any card, code, or other means of access to such con- sumer’s account for the purpose of initiating an electronic fund transfer other than— (1) in response to a request or application therefor; or (2) as a renewal of, or in substitution for, an accepted card, code, or other means of access, whether issued by the initial issuer or a suc- cessor. (b) Exceptions Notwithstanding the provisions of subsection (a), a person may distribute to a consumer on an unsolicited basis a card, code, or other means of access for use in initiating an electronic fund transfer from such consumer’s account, if— (1) such card, code, or other means of access is not validated; (2) such distribution is accompanied by a complete disclosure, in accordance with sec- tion 1693c of this title, of the consumer’s rights and liabilities which will apply if such card, code, or other means of access is vali- dated; (3) such distribution is accompanied by a clear explanation, in accordance with regula- tions of the Bureau, that such card, code, or other means of access is not validated and how the consumer may dispose of such code, card, or other means of access if validation is not desired; and (4) such card, code, or other means of access is validated only in response to a request or application from the consumer, upon verification of the consumer’s identity. (c) Validation For the purpose of subsection (b), a card, code, or other means of access is validated when it