S T A T E O F N E W Y O R K
________________________________________________________________________
4994
2009-2010 Regular Sessions
I N A S S E M B L Y
February 10, 2009
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Introduced by M. of A. BRODSKY, JAFFEE, FIELDS -- read once and referred
to the Committee on Consumer Affairs and Protection
AN ACT to amend the general business law, in relation to merchants
access to credit card rules and rates
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The general business law is amended by adding a new section
518-b to read as follows:
S 518-B. MERCHANTS ACCESS TO CREDIT CARD RULES AND RATES. 1. AS USED
IN THIS ARTICLE, THE FOLLOWING TERMS HAVE THE FOLLOWING MEANINGS:
(A) "ACQUIRER" MEANS AN INSTITUTION DOING BUSINESS IN THIS STATE PROC-
ESSING MERCHANT ACCOUNTS;
(B) "CREDIT CARD" MEANS A VALID CARD AUTHORIZING THE CARDHOLDER TO BUY
GOODS OR SERVICES ON CREDIT AND BEARING THE SERVICE MARK OF A CREDIT
CARD ASSOCIATION OR NETWORK. SUCH TERM SHALL INCLUDE THE NUMBER
ASSIGNED TO AN INSTRUMENT OR DEVICE DESCRIBED IN THIS PARAGRAPH EVEN IF
THE PHYSICAL INSTRUMENT OR DEVICE IS NOT USED OR PRESENTED;
(C) "DEBIT CARD" MEANS: (I) ANY INSTRUMENT OR DEVICE WHETHER KNOWN AS
A DEBIT CARD, ELECTRONIC BENEFIT TRANSFER CARD OR ANY OTHER ACCESS
INSTRUMENT OR DEVICE, OTHER THAN A CHECK, THAT IS SIGNED BY THE HOLDER
OR OTHER AUTHORIZED SIGNATORY ON THE DEPOSIT ACCOUNT THAT DRAWS MONIES
FROM A DEPOSIT ACCOUNT IN ORDER TO OBTAIN MONEY, GOODS, SERVICES OR
ANYTHING ELSE OF VALUE; (II) ANY STORED VALUE CARD, SMART CARD OR OTHER
INSTRUMENT OR DEVICE THAT ENABLES A PERSON TO OBTAIN GOODS, SERVICES OR
ANYTHING ELSE OF VALUE THROUGH THE USE OF VALUE STORED ON THE INSTRUMENT
OR DEVICE; AND (III) THE NUMBER ASSIGNED TO AN INSTRUMENT OR DEVICE
DESCRIBED IN SUBPARAGRAPHS (I) OR (II) OF THIS PARAGRAPH EVEN IF THE
PHYSICAL INSTRUMENT OR DEVICE IS NOT USED OR PRESENTED;
(D) "FINANCIAL INSTITUTION" MEANS ANY BANK, SAVINGS ASSOCIATION,
SAVINGS BANK, CREDIT UNION OR INDUSTRIAL LOAN COMPANY;
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08246-01-9
A. 4994 2
(E) "INTERCHANGE FEE" MEANS THE FEE THAT AN ACQUIRER PAYS TO AN ISSU-
ING BANK WHEN A CARDHOLDER USES A CREDIT CARD OR DEBIT CARD AS PAYMENT
DURING A RETAIL TRANSACTION;
(F) "ISSUING BANK" MEANS A FINANCIAL INSTITUTION WHICH ISSUES CREDIT
OR DEBIT CARDS TO CARDHOLDERS;
(G) "MERCHANT ACCOUNT" MEANS A BANK ACCOUNT THAT ALLOWS A MERCHANT TO
ACCEPT CREDIT CARD OR DEBIT CARD PAYMENTS;
(H) "MERCHANT" MEANS A PERSON OR ENTITY AUTHORIZED TO DO BUSINESS IN
THIS STATE WHICH OFFERS GOODS OR SERVICES FOR SALE IN THIS STATE;
(I) "CREDIT CARD ASSOCIATION" MEANS ANY ENTITY FORMED TO ADMINISTER
AND PROMOTE CREDIT CARDS.
2. A CREDIT CARD ASSOCIATION, ISSUING BANK OR ACQUIRER FACILITATING
THE ACCEPTANCE OF CREDIT OR DEBIT CARD TRANSACTIONS IN THE STATE SHALL:
(A) MAKE AVAILABLE TO A MERCHANT LOCATED IN THIS STATE A COMPLETE
PAPER COPY OF THE CONTRACT, RATES, INCLUDING THE APPLICABLE INTERCHANGE
FEES, AND RULES WHICH APPLY TO THAT MERCHANT AS REFERENCED IN THE
CONTRACT, EITHER INDIVIDUALLY OR THROUGH AN ACQUIRER; AND
(B) NOTIFY A MERCHANT LOCATED IN THIS STATE WHEN A REFERENCED RATE OR
RULE HAS BEEN CHANGED OR A NEW RATE AND RULE ADDED WHICH APPLIES TO THAT
MERCHANT PRIOR TO THE EFFECTIVE DATE OF THE NEW OR REVISED RATE OR RULE
AND PROVIDE A WRITTEN COPY OF THE NEW OR MODIFIED RATE OR RULE TO SUCH
MERCHANT. INSTEAD OF PROVIDING A PAPER COPY OF THE NOTICES REQUIRED
HEREIN, THE CONTRACTING ENTITY, ISSUING BANK OR CREDIT CARD ASSOCIATION
MAY PROVIDE THE MERCHANT WITH ACCESS TO THE RATES OR RULES IN A FORM
THAT MAY BE DOWNLOADED AND PRINTED BY THE MERCHANT PRIOR TO THE EFFEC-
TIVE DATE OF SUCH RATE OR RULE.
3. A CONTRACT AUTHORIZING A MERCHANT TO ACCEPT A CREDIT OR DEBIT CARD
SHALL CONTAIN:
(A) THE COMPLETE SCHEDULE OF INTERCHANGE FEES, CREDIT CARD AND DEBIT
CARD TRANSACTION RATES AND ANY OTHER FEES THAT THE FINANCIAL INSTITUTION
OR ACQUIRER CHARGES TO MERCHANTS; AND
(B) A NOTICE THAT IDENTIFIES WHICH RATES AND RULES APPLY TO THE
MERCHANT AND THE SITUATIONS IN WHICH THOSE RATES AND RULES APPLY. AN
ISSUING BANK AND CREDIT CARD ASSOCIATION SHALL PROVIDE TO AN ACQUIRER
ANY INFORMATION NECESSARY TO COMPLY WITH THE PROVISIONS OF THIS SECTION.
4. A VIOLATION OF THIS SECTION SHALL BE DEEMED TO BE UNLAWFUL DECEP-
TIVE ACTS AND PRACTICES UNDER SECTION THREE HUNDRED FORTY-NINE OF THIS
CHAPTER. ALL OF THE REMEDIES, POWERS, DUTIES AND PENALTIES PERTAINING TO
UNLAWFUL DECEPTIVE ACTS AND PRACTICES UNDER SECTION THREE HUNDRED
FORTY-NINE OF THIS CHAPTER SHALL APPLY TO VIOLATIONS OF THIS SECTION.
S 2. If any section, subdivision, sentence, clause or phrase of this
legislation is for any reason held to be invalid or unconstitutional by
a decision of any court of competent jurisdiction such decision shall
not affect the validity of the remaining portions of this legislation.
The legislature hereby declares that it would have passed this legis-
lation and each section, subdivision, sentence, clause or phrase not
declared invalid or unconstitutional without regard to whether any
portion of the legislation would subsequently be declared invalid or
unconstitutional.
S 3. This act shall take effect on the one hundred eightieth day after
it shall have become a law.