BILL NUMBER: AB 844 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 19, 2013
INTRODUCED BY Assembly Member Dickinson
FEBRUARY 21, 2013
An act to amend Section 2944.7 of Sections
1747.02, 1747.08, 1747.09, and 1748.30 of, and to add Section
1747.08.1 to, the Civil Code, and to amend Section 99030
of the Education C ode, relating to
mortgages credit and debit cards .
LEGISLATIVE COUNSEL'S DIGEST
AB 844, as amended, Dickinson. Mortgage loan
modification. Credit and debit cards: transactions:
personal information.
Existing state and federal law regulate the provision of credit
and the use of credit cards. Existing state law prohibits a person,
firm, partnership, association, or corporation that accepts credit
cards for the transaction of business from requesting or requiring
the cardholder to provide personal identification information, which
is then recorded, as a condition to accepting the credit card as
payment in full or in part for goods or services, but provides
various exceptions to this prohibition.
Under existing law, a person who violates the above provisions is
subject to specified civil penalties, an action for injunctive
relief, or both.
This bill would extend the above restrictions regarding the
collection of personal identification information to debit cards. The
bill would define "debit card" and related terms for these purposes,
and would make conforming changes.
This bill would prohibit the operator of a commercial Internet Web
site or online service that collects personal identifiable
information from requiring a credit cardholder or debit cardholder to
provide any information other than a ZIP Code to complete the
Internet credit card or debit card transaction, except under
specified circumstances. The bill would authorize the assessment of
civil penalties or an action for injunctive relief, or both, for a
violation of these provisions.
Existing law prohibits a person, firm, partnership, association,
corporation, or limited liability company that accepts credit or
debit cards for the transaction of business from printing more than
the last 5 digits of an individual's credit card or debit card
number, or the expiration date, on a transaction receipt, as
specified.
This bill would revise the above provisions to remove specific
references to printed receipts, and would make other conforming
changes.
Existing law, applicable to residential mortgages, prohibits a
person who negotiates, arranges, or otherwise offers to perform a
mortgage loan modification or other form of mortgage loan forbearance
for a fee or other compensation from, among other things, demanding
or receiving any compensation until every service that the person
contracted to perform or represented that he or she would perform is
accomplished.
This bill would make technical, nonsubstantive changes to these
provisions.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1747.02 of the Civil
Code is amended to read:
1747.02. As used in this title:
(a) "Credit card" means any card, plate, coupon book, or other
single credit device existing for the purpose of being used from time
to time upon presentation to obtain money,
property, labor, or services on credit. "Credit card" does not mean
any of the following:
(1) Any single credit device used to obtain telephone property,
labor, or services in any transaction under public utility tariffs.
(2) Any device that may be used to obtain credit pursuant to an
electronic fund transfer, but only if the credit is obtained under an
agreement between a consumer and a financial institution to extend
credit when the consumer's asset account is overdrawn or to maintain
a specified minimum balance in the consumer's asset account.
(3) Any key or card key used at an automated dispensing outlet to
obtain or purchase petroleum products, as defined in subdivision (c)
of Section 13401 of the Business and Professions Code, that will be
used primarily for business rather than personal or family purposes.
(b) "Accepted credit card" means any credit card that the
cardholder has requested or applied for and received or has signed,
or has used, or has authorized another person to use, for the purpose
of obtaining money, property, labor, or services on credit. Any
credit card issued in renewal of, or in substitution for, an accepted
credit card becomes an accepted credit card when received by the
cardholder, whether the credit card is issued by the same or a
successor card issuer.
(c) "Debit card" means an accepted debit card or other means of
access to a debit cardholder's account that may be used to initiate
electronic funds transfers and may be used without unique identifying
information such as a personal identification number to initiate
access to the debit cardholder's account.
(d) "Accepted debit card" means a debit card that the debit
cardholder has requested and received or has signed, or has used, or
has authorized another person to use, for the purpose of obtaining
money, property, labor, or services. Any debit card issued in renewal
of, or in substitution for, an accepted debit card becomes an
accepted debit card when received by the debit cardholder, whether
the debit card is issued by the same or by a successor card issuer.
(c)
(e) "Card issuer" means any person who issues a credit
card or the agent of that person for that purpose with respect to the
credit card.
(d)
(f) "Cardholder" means a natural person to whom a credit
card is issued for consumer credit purposes, or a natural person who
has agreed with the card issuer to pay consumer credit obligations
arising from the issuance of a credit card to another natural person.
For purposes of Sections 1747.05, 1747.10, and 1747.20, the term
includes any person to whom a credit card is issued for any purpose,
including business, commercial, or agricultural use, or a person who
has agreed with the card issuer to pay obligations arising from the
issuance of that credit card to another person.
(g) "Debit card issuer" means any person who issues a debit card
or the agent of that person for that purpose.
(h) "Debit cardholder" means a natural person to whom a debit card
is issued.
(e)
(i) "Retailer" means every person other than a card
issuer or debit card issuer who furnishes money, goods,
services, or anything else of value upon presentation of a credit
card or debit card by a cardholder or debit
cardholder . "Retailer" shall not mean the state, a county,
city, city and county, or any other public agency.
(f)
(j) "Unauthorized use" means the use of a credit card
or debit card by a person, other than the cardholder
or debit cardholder , (1) who does not have actual, implied, or
apparent authority for that use and (2) from which the cardholder
or debit card holder receives no benefit. "Unauthorized
use" does not include the use of a credit card or debit card
by a person who has been given authority by the cardholder
or debit cardholder to use the credit card or debit card
. Any attempted termination by the cardholder or debit
cardholder of the person's authority is ineffective as against
the card issuer or debit card issuer until the cardholder
or debit cardholder complies with the procedures required
by the card issuer or debit card issuer to terminate that
authority. Notwithstanding the above, following the card issuer's
or debit card issuer's receipt of oral or written notice
from a cardholder or debit cardholder indicating that it
wishes to terminate the authority of a previously authorized user of
a credit card or debit card , the card issuer or
debit card issuer shall follow its usual procedures for
precluding any further use of a credit card or debit card
by an unauthorized person.
(g)
(k) An "inquiry" is a writing that is posted by mail to
the address of the card issuer or debit card issuer to
which payments are normally tendered, unless another address is
specifically indicated on the statement for that purpose, then to
that other address, and that is received by the card issuer or
debit card issuer no later than 60 days after the card issuer
transmitted the first periodic statement that reflects the alleged
billing error, and that does all of the following:
(1) Sets forth sufficient information to enable the card issuer
or debit card issuer to identify the cardholder or
debit cardholder and the account.
(2) Sufficiently identifies the billing error.
(3) Sets forth information providing the basis for the cardholder'
s or debit cardholder's belief that the billing error
exists.
(h)
(l) A "response" is a writing that is responsive to an
inquiry and mailed to the cardholder's or debit
cardholder's address last known to the card issuer or
debit card issuer .
(i)
(m) A "timely response" is a response that is mailed
within two complete billing cycles, but in no event later than 90
days, after the card issuer or debit card issuer receives
an inquiry.
(j)
(n) A "billing error" means an error by omission or
commission in (1) posting any debit or credit, or (2) in computation
or similar error of an accounting nature contained in a statement
given to the cardholder or debit cardholder by the card
issuer or debit card issuer . A "billing error" does not
mean any dispute with respect to value, quality, or quantity of
goods, services, or other benefit obtained through use of a credit
card or debit card .
(k)
(o) "Adequate notice" means a printed notice to a
cardholder or debit cardholder that sets forth the
pertinent facts clearly and conspicuously so that a person against
whom it is to operate could reasonably be expected to have noticed it
and understood its meaning.
(l)
(p) "Secured credit card" means any credit card issued
under an agreement or other instrument that pledges, hypothecates, or
places a lien on real property or money or other personal property
to secure the cardholder's obligations to the card issuer.
(m)
(q) "Student credit card" means any credit card that is
provided to a student at a public or private college or university
and is provided to that student solely based on his or her enrollment
in a public or private university, or is provided to a student who
would not otherwise qualify for that credit card on the basis of his
or her income. A "student credit card" does not include a credit card
issued to a student who has a cocardholder or cosigner who would
otherwise qualify for a credit card other than a student credit card.
(n)
(r) "Retail motor fuel dispenser" means a device that
dispenses fuel that is used to power internal combustion engines,
including motor vehicle engines, that processes the sale of fuel
through a remote electronic payment system, and that is in a location
where an employee or other agent of the seller is not present.
(o)
(s) "Retail motor fuel payment island automated cashier"
means a remote electronic payment processing station that processes
the retail sale of fuel that is used to power internal combustion
engines, including motor vehicle engines, that is in a location where
an employee or other agent of the seller is not present, and that is
located in close proximity to a retail motor fuel dispenser.
SEC. 2. Section 1747.08 of the Civil
Code is amended to read:
1747.08. (a) Except as provided in subdivision (c), no person,
firm, partnership, association, or corporation that accepts credit
cards or debit cards for the transaction of business shall
do any of the following:
(1) Request, or require as a condition to accepting the credit
card or debit card as payment in full or in part for goods
or services, the cardholder or debit cardholder to
write provide any personal
identification information upon the credit card transaction
form or otherwise .
(2) Request, or require as a condition to accepting the credit
card or debit card as payment in full or in part for goods
or services, the cardholder or debit cardholder to
provide personal identification information, which the person, firm,
partnership, association, or corporation accepting the credit card
writes or debit card collects , causes
to be written collected , or otherwise
records upon the credit card or debit card transaction
form template or otherwise.
(3) Utilize, in any credit card or debit card
transaction, a credit card form or debit card
template which contains preprinted spaces
specifically designated for filling in any personal identification
information of the cardholder or debit cardholder .
(b) For purposes of this section "personal identification
information," means information concerning the cardholder or
debit cardholder , other than information set forth on the
credit card or debit card , and including, but not limited
to, the cardholder's or debit cardholder's address and
telephone number.
(c) Subdivision (a) does not apply in the following instances:
(1) If the credit card or debit card is being used as a
deposit to secure payment in the event of default, loss, damage, or
other similar occurrence.
(2) Cash advance transactions.
(3) If any of the following applies:
(A) The person, firm, partnership, association, or corporation
accepting the credit card or debit card is contractually
obligated to provide personal identification information in order to
complete the credit card or debit card transaction.
(B) The person, firm, partnership, association, or corporation
accepting the credit card in a sales transaction at a retail motor
fuel dispenser or retail motor fuel payment island automated cashier
uses the Zip ZIP Code information
solely for prevention of fraud, theft, or identity theft.
(C) The person, firm, partnership, association, or corporation
accepting the credit card or debit card is obligated to
collect and record the personal identification information by federal
or state law or regulation.
(4) If personal identification information is required for a
special purpose incidental but related to the individual credit card
or debit card transaction, including, but not limited to,
information relating to shipping, delivery, servicing, or
installation of the purchased merchandise, or for special orders.
(d) This section does not prohibit any person, firm, partnership,
association, or corporation from requiring the cardholder or
debit cardholder , as a condition to accepting the credit card
or debit card as payment in full or in part for goods or
services, to provide reasonable forms of positive identification,
which may include a driver's license or a California state
identification card, or where one of these is not available, another
form of photo identification, provided that none of the information
contained thereon is written collected
or recorded on the credit card or debit card transaction
form template or otherwise. If the
cardholder or debit cardholder pays for the transaction
with a credit card or debit card number and does not make
the credit card or debit card available upon request to
verify the number, the cardholder's or debit cardholder's
driver's license number or identification card number may be recorded
on the credit card transaction form or otherwise.
(e) Any person who violates this section shall be subject to a
civil penalty not to exceed two hundred fifty dollars ($250) for the
first violation and one thousand dollars ($1,000) for each subsequent
violation, to be assessed and collected in a civil action brought by
the person paying with a credit card or debit card , by
the Attorney General, or by the district attorney or city attorney of
the county or city in which the violation occurred. However, no
civil penalty shall be assessed for a violation of this section if
the defendant shows by a preponderance of the evidence that the
violation was not intentional and resulted from a bona fide error
made notwithstanding the defendant's maintenance of procedures
reasonably adopted to avoid that error. When collected, the civil
penalty shall be payable, as appropriate, to the person paying with a
credit card or debit card who brought the action, or to
the general fund of whichever governmental entity brought the action
to assess the civil penalty.
(f) The Attorney General, or any district attorney or city
attorney within his or her respective jurisdiction, may bring an
action in the superior court in the name of the people of the State
of California to enjoin violation of subdivision (a) and, upon notice
to the defendant of not less than five days, to temporarily restrain
and enjoin the violation. If it appears to the satisfaction of the
court that the defendant has, in fact, violated subdivision (a), the
court may issue an injunction restraining further violations, without
requiring proof that any person has been damaged by the violation.
In these proceedings, if the court finds that the defendant has
violated subdivision (a), the court may direct the defendant to pay
any or all costs incurred by the Attorney General, district attorney,
or city attorney in seeking or obtaining injunctive relief pursuant
to this subdivision.
(g) Actions for collection of civil penalties under subdivision
(e) and for injunctive relief under subdivision (f) may be
consolidated.
(h) The changes made to this section by Chapter 458 of the
Statutes of 1995 apply only to credit card transactions entered into
on and after January 1, 1996. Nothing in those changes shall be
construed to affect any civil action which was filed before January
1, 1996.
SEC. 3. Section 1747.08.1 is added to the
Civil Code , to read:
1747.08.1. (a) An operator of a commercial Internet Web site or
online service that collects personal identifiable information for a
credit card or debit card transaction shall not require a cardholder
or a debit cardholder to provide any information other than their ZIP
Code to complete the credit card or debit card transaction through
the Internet.
(b) Subdivision (a) does not apply to any of the following:
(1) Instances in which the credit card is being used as a deposit
to secure payment in the event of default, loss, damage, or other
similar occurrence.
(2) Cash advance transactions.
(3) Instances in which either of the following applies:
(A) An operator of a commercial Internet Web site or online
service is contractually obligated to provide personal identifiable
information in order to complete the credit card or debit card
transaction.
(B) An operator of a commercial Internet Web site or online
service is obligated to collect and record the personal identifiable
information by federal or state law or regulation.
(4) Instances in which personal identifiable information is
required for a special purpose incidental but related to the
individual credit card or debit card transaction, including, but not
limited to, information relating to shipping, delivery, servicing, or
installation of the purchased merchandise, or for special orders.
(c) For purposes of this section, the following definitions apply:
(1) "Personal identifiable information" means individually
identifiable information about an individual consumer, collected
online by the operator from that individual, and maintained by the
operator in an accessible form, an includes any of the following:
(A) First and last name.
(B) Home or other physical address, including street name and name
of a city or town.
(C) E-mail address.
(D) Telephone number.
(2) "Operator" means a person or entity that owns an Internet Web
site or an online service that collects and maintains personal
identifiable information from a consumer residing in California who
uses or visits the Internet Web site or online service if the
Internet Web site or online service is operated for commercial
purposes.
(3) "Consumer" means an individual who seeks or acquires, by
purchase or lease, any goods, services, money, or credit for
personal, family, or household purposes.
(d) (1) A person who violates this section shall be subject to a
civil penalty not to exceed two hundred fifty dollars ($250) for the
first violation and one thousand dollars ($1,000) for each subsequent
violation, to be assessed and collected in a civil action brought by
the person paying with a credit card or debit card, by the Attorney
General, or by the district attorney or city attorney of the county
or city in which the violation occurred.
(2) Notwithstanding paragraph (1), a civil penalty shall not be
assessed for a violation of this section if the defendant shows, by a
preponderance of the evidence, that the violation was not
intentional and resulted from a bona fide error made notwithstanding
the defendant's maintenance of procedures reasonably adopted to avoid
that error.
(3) When collected, the civil penalty shall be payable, as
appropriate, to the person paying with a credit card or debit card
who brought the action, or to the general fund of the governmental
entity that brought the action to assess the civil penalty.
(e) The Attorney General, or any district attorney or city
attorney within his or her respective jurisdiction, may bring an
action in the superior court in the name of the people of the State
of California to enjoin violation of subdivision (a) and, upon notice
to the defendant of not less than five days, to temporarily restrain
and enjoin the violation. If it appears to the satisfaction of the
court that the defendant has, in fact, violated subdivision (a), the
court may issue an injunction restraining further violations, without
requiring proof that any person has been damaged by the violation.
In these proceedings, if the court finds that the defendant has
violated subdivision (a), the court may direct the defendant to pay
any or all costs incurred by the Attorney General, district attorney,
or city attorney in seeking or obtaining injunctive relief pursuant
to this subdivision.
(f) Actions for collection of civil penalties under subdivision
(d) and for injunctive relief under subdivision (e) may be
consolidated.
(g) This section shall apply only to credit card and debit card
transactions entered into on and after January 1, 2014. This section
shall not be construed to affect any civil action that was filed
before January 1, 2014.
SEC. 4. Section 1747.09 of the Civil
Code is amended to read:
1747.09. (a) Except as provided in this section, no person, firm,
partnership, association, corporation, or limited liability company
that accepts credit or debit cards for the transaction of business
shall print display more than the last
five digits of the credit or debit card account number or the
expiration date upon any of the following:
(1) Any receipt provided to the cardholder.
(2) Any receipt retained by the person, firm, partnership,
association, corporation, or limited liability company ,
which is printed at the time of the purchase, exchange, refund, or
return, and is signed by the cardholder .
(3) Any receipt retained by the person, firm, partnership,
association, corporation, or limited liability company ,
which is printed that at the time of the
purchase, exchange, refund, or return, but is not
signed by the cardholder, because the cardholder or debit
cardholder used a personal identification number to complete
the transaction.
(b) This section shall apply only to receipts that include a
credit or debit card account number that are electronically printed
and shall not apply to transactions in which the sole means of
recording the person's credit or debit card account number is by
handwriting or by an imprint or copy of the credit or debit card.
(c) This section shall not apply to documents, other than the
receipts described in paragraphs (1) to (3), inclusive, of
subdivision (a), used for internal administrative purposes.
(d) Paragraphs (2) and (3) of subdivision (a) shall become
operative on January 1, 2009.
SEC. 5. Section 1748.30 of the Civil
Code is amended to read:
1748.30. For purposes of this title, the following definitions
shall apply:
(a) "Accepted debit card" means any debit card which the debit
cardholder has requested and received or has signed, or has used, or
has authorized another person to use, for the purpose of obtaining
money, property, labor, or services. Any debit card issued in renewal
of, or in substitution for, an accepted debit card becomes an
accepted debit card when received by the debit cardholder, whether
the debit card is issued by the same or by a successor card issuer.
(b) "Account" means a demand deposit (checking), savings, or other
consumer asset account, other than an occasional or incidental
credit balance in a credit plan, established primarily for personal,
family, or household purposes.
(c) "Adequate notice" has the same meaning as found in subdivision
(k) (o) of Section 1747.02.
(d) "Debit card" means an accepted debit card or other means of
access to a debit cardholder's account that may be used to initiate
electronic funds transfers and may be used without unique identifying
information such as a personal identification number to initiate
access to the debit cardholder's account.
(e) "Debit card issuer" means any person who issues a debit card
or the agent of that person for that purpose.
(f) "Debit cardholder" means a natural person to whom a debit card
is issued.
(g) "Unauthorized use" means the use of a debit card by a person,
other than the debit cardholder, to initiate an electronic fund
transfer from the debit cardholder's account without actual authority
to initiate the transfer and from which the debit cardholder
receives no benefit. The term does not include an electronic fund
transfer initiated in any of the following manners:
(1) By a person who was furnished the debit card to the debit
cardholder's account by the debit cardholder, unless the debit
cardholder has notified the debit card issuer that transfers by that
person are no longer authorized.
(2) With fraudulent intent by the debit cardholder or any person
acting in concert with the debit cardholder.
(3) By the debit card issuer or its employee.
SEC. 6. Section 99030 of the Education
Code is amended to read:
99030. The Regents of the University of California and the
governing body of each accredited private or independent college or
university in the state are requested to, and the Trustees of the
California State University and the Board of Governors of the
California Community Colleges shall, adopt policies to regulate the
marketing practices used on campuses by credit card companies. In
adopting the policies, it is the intent of the Legislature that those
entities consider including all of the following requirements:
(a) That sites at which student credit cards are marketed be
registered with the campus administration and that consideration be
given to limiting the number of sites allowed on a campus.
(b) That marketers of student credit cards be prohibited from
offering gifts to students for filling out credit card applications.
(c) That credit card and debt education and counseling sessions
become a regular part of campus orientation of new students. For
purposes of this section, colleges and universities shall utilize
existing debt education materials prepared by nonprofit entities and
thus not incur the expense of preparing new materials.
(d) For the purposes of this chapter, "student credit card" has
the meaning set forth in subdivision (m) (q)
of Section 1747.02 of the Civil Code.
SECTION 1. Section 2944.7 of the Civil Code is
amended to read:
2944.7. (a) Notwithstanding any other law, it shall be unlawful
for a person who negotiates, attempts to negotiate, arranges,
attempts to arrange, or otherwise offers to perform a mortgage loan
modification or other form of mortgage loan forbearance for a fee or
other compensation paid by the borrower to do any of the following:
(1) Claim, demand, charge, collect, or receive any compensation
until after the person has fully performed each and every service the
person contracted to perform or represented that he or she would
perform.
(2) Take any
wage assignment, any lien of any type on real or personal property,
or other security to secure the payment of compensation.
(3) Take any power of attorney from the borrower for any purpose.
(b) A violation of this section by a natural person is a public
offense punishable by a fine not exceeding ten thousand dollars
($10,000), by imprisonment in the county jail for a term not to
exceed one year, or by both that fine and imprisonment, or if by a
business entity, the violation is punishable by a fine not exceeding
fifty thousand dollars ($50,000). These penalties are cumulative to
any other remedies or penalties provided by law.
(c) Nothing in this section precludes a person, or an agent acting
on that person's behalf, who offers loan modification or other loan
forbearance services for a loan owned or serviced by that person,
from doing any of the following:
(1) Collecting principal, interest, or other charges under the
terms of a loan, before the loan is modified, including charges to
establish a new payment schedule for a nondelinquent loan, after the
borrower reduces the unpaid principal balance of that loan for the
express purpose of lowering the monthly payment due under the terms
of the loan.
(2) Collecting principal, interest, or other charges under the
terms of a loan, after the loan is modified.
(3) Accepting payment from a federal agency in connection with the
federal Making Home Affordable Plan or other federal plan intended
to help borrowers refinance or modify their loans or otherwise avoid
foreclosures.
(d) This section shall apply only to mortgages and deeds of trust
secured by residential real property containing four or fewer
dwelling units.