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
                               ___________

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.