Maryland 2024 Regular Session

Maryland House Bill HB1156 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb1156
6	6
7	7	HOUSE BILL 1156
8	8	I4, I2 4lr1823
9	9	CF SB 930
10	10	By: Delegates Stewart and Griffith
11	11	Introduced and read first time: February 7, 2024
12	12	Assigned to: Economic Matters
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Commercial Law – Consumer Wire Transfers – Liability 2
19	19	(Elder Fraud Prevention Act of 2024) 3
20	20
21	21	FOR the purpose of exempting certain transactions from certain provisions of the Maryland 4
22	22	Uniform Commercial Code; limiting a consumer’s liability for damages resulting 5
23	23	from certain consumer wire transfers; requiring certain notice to conform to certain 6
24	24	requirements in order to be considered sufficient; requiring certain investigations of 7
25	25	certain allegations regarding consumer wire transfers; requiring decisions and 8
26	26	materials be provided to a consumer in certain circumstances; subjecting certain 9
27	27	financial institutions to treble damages under certain circumstances; subjecting 10
28	28	certain financial institutions to certain liability for violation of this Act; prohibiting 11
29	29	the waiver of rights conferred on a consumer by this Act; exempting certain wire 12
30	30	transfers from this Act; and generally relating to consumer wire transfers. 13
31	31
32	32	BY repealing and reenacting, without amendments, 14
33	33	Article – Commercial Law 15
34	34	Section 4A–102 16
35	35	Annotated Code of Maryland 17
36	36	(2013 Replacement Volume and 2023 Supplement) 18
37	37
38	38	BY repealing and reenacting, with amendments, 19
39	39	Article – Commercial Law 20
40	40	Section 4A–108 21
41	41	Annotated Code of Maryland 22
42	42	(2013 Replacement Volume and 2023 Supplement) 23
43	43
44	44	BY adding to 24
45	45	Article – Commercial Law 25
46	46	Section 12–1501 through 12–1507 to be under the new subtitle “Subtitle 15. 26
47	47	Consumer Wire Transfers” 27
48	48	Annotated Code of Maryland 28 2 HOUSE BILL 1156
49	49
50	50
51	51	(2013 Replacement Volume and 2023 Supplement) 1
52	52
53	53	SECTION 1. BE IT ENACT ED BY THE GENERAL ASSEMBLY OF MARYLAND, 2
54	54	That the Laws of Maryland read as follows: 3
55	55
56	56	Article – Commercial Law 4
57	57
58	58	4A–102. 5
59	59
60	60	Except as otherwise provided in § 4A–108 of this subtitle, this title applies to funds 6
61	61	transfers defined in § 4A–104 of this subtitle. 7
62	62
63	63	4A–108. 8
64	64
65	65	(a) Except as provided in subsection (b) of this section, this title does not apply to 9
66	66	a funds transfer [any]: 10
67	67
68	68	(1) THAT IS A WIRE TRANSFER INITIATED BY AN INDIVIDUAL; OR 11
69	69
70	70	(2) ANY part of which is governed by the Electronic Fund Transfer Act of 12
71	71	1978 (Title XX, Public Law 95–630, 92 Stat. 3728, 15 U.S.C. § 1693 et seq.) as amended 13
72	72	from time to time. 14
73	73
74	74	(b) This title applies to a funds transfer that is [a]: 15
75	75
76	76	(1) A WIRE TRANSFER INITIATED BY AN INDI VIDUAL, TO THE EXTENT 16
77	77	THAT THE PROVISIONS OF THIS TITLE DO NOT CONFLICT WITH THE PR OVISIONS OF 17
78	78	TITLE 12, SUBTITLE 15 OF THIS ARTICLE; OR 18
79	79
80	80	(2) A remittance transfer as defined in the Electronic Fund Transfer Act 19
81	81	(15 U.S.C. § 1693o–1) as amended from time to time, unless the remittance transfer is an 20
82	82	electronic fund transfer as defined in the Electronic Fund Transfer Act (15 U.S.C. § 1693a) 21
83	83	as amended from time to time. 22
84	84
85	85	(c) In a funds transfer to which this title applies, in the event of an inconsistency 23
86	86	between an applicable provision of this title and an applicable provision of the Electronic 24
87	87	Fund Transfer Act, the provision of the Electronic Fund Transfer Act governs to the extent 25
88	88	of the inconsistency. 26
89	89
90	90	SUBTITLE 15. CONSUMER WIRE TRANSFERS. 27
91	91
92	92	12–1501. 28
93	93
94	94	(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANI NGS 29
95	95	INDICATED. 30
96	96	HOUSE BILL 1156 3
97	97
98	98
99	99	(B) “CONSUMER” MEANS AN INDIVIDUAL . 1
100	100
101	101	(C) “CONSUMER WIRE TRANSFE R” MEANS A WIRE TRANSFE R THAT IS 2
102	102	INITIATED BY A CONSU MER. 3
103	103
104	104	(D) “CONSUMER’S FINANCIAL INSTITUT ION” MEANS A FINANCIAL 4
105	105	INSTITUTION THAT PRO VIDES A CONSUMER WITH AN A CCOUNT AND A MEANS B Y 5
106	106	WHICH TO MAKE A CONS UMER WIRE TRANSFER . 6
107	107
108	108	(E) (1) “ELECTRONIC TERMINAL ” MEANS AN ELECTRONIC DEVICE THAT 7
109	109	A CONSUMER MAY USE T O INITIATE A TRANSFER OF FUNDS . 8
110	110
111	111	(2) “ELECTRONIC TERMINAL ” INCLUDES AN AUTOMATE D TELLER 9
112	112	MACHINE, A POINT–OF–SALE TERMINAL , AND A CASH–DISPENSING MACHINE . 10
113	113
114	114	(F) (1) “ERROR” MEANS AN INACCURACY APPEARING ON A STATE MENT 11
115	115	OF A CONSUMER ’S ACCOUNT. 12
116	116
117	117	(2) “ERROR” INCLUDES: 13
118	118
119	119	(I) AN UNAUTHORIZED DEBIT ; 14
120	120
121	121	(II) AN INCORRECT TRANSFER T O OR FROM THE CONSUM ER’S 15
122	122	ACCOUNT; 16
123	123
124	124	(III) OMISSION OF A TRANSACTION THA T SHOULD HAVE BEEN 17
125	125	INCLUDED IN THE STAT EMENT; 18
126	126
127	127	(IV) A COMPUTATIONAL ERROR BY THE CONSUMER ’S FINANCIAL 19
128	128	INSTITUTION; 20
129	129
130	130	(V) A CONSUMER ’S RECEIPT OF AN INCO RRECT AMOUNT FROM 21
131	131	AN ELECTRONIC TERMIN AL; AND 22
132	132
133	133	(VI) ANOTHER ERROR IDENTIFIED BY THE FEDERAL CONSUMER 23
134	134	FINANCIAL PROTECTION BUREAU UNDER THE FEDERAL ELECTRONIC FUNDS 24
135	135	TRANSFER ACT. 25
136	136
137	137	(G) “OVERDRAFT PROTECTION ” MEANS AN EXTENSION OF CREDIT BY A 26
138	138	CONSUMER ’S FINANCIAL INSTITUT ION TO COVER ANY LIA BILITY INCURRED BY A 27
139	139	DEBIT OF THE CONSUME R’S ACCOUNT BY AN AMOU NT IN EXCESS OF THE ACCOUNT 28
140	140	BALANCE. 29
141	141	4 HOUSE BILL 1156
142	142
143	143
144	144	(H) (1) “VERIFICATION MECHANIS M” MEANS A MEANS BY WHI CH AN 1
145	145	INDIVIDUAL’S AUTHORI TY TO INITIATE A CONSUMER WIRE TRANSFER MAY BE 2
146	146	CONFIRMED . 3
147	147
148	148	(2) “VERIFICATION MECHANIS M” INCLUDES VERIFICATIO N BY 4
149	149	SIGNATURE, FINGERPRINT, OR A PERSONAL IDENTI FICATION NUMBER . 5
150	150
151	151	12–1502. 6
152	152
153	153	THIS SUBTITLE DOES NO T APPLY TO A WIRE TR ANSFER OF WHICH ANY PART 7
154	154	IS GOVERNED BY THE FEDE RAL ELECTRONIC FUND TRANSFER ACT. 8
155	155
156	156	12–1503. 9
157	157
158	158	(A) EXCEPT AS PROVIDED IN THIS SECTION, A CONSUMER IS NOT LI ABLE 10
159	159	FOR DAMAGES RESULTIN G FROM AN UNAUTHORIZ ED CONSUMER WIRE TRA NSFER. 11
160	160
161	161	(B) A CONSUMER IS LIABLE F OR DAMAGES RESULTING FROM AN 12
162	162	UNAUTHORIZED CONSUME R WIRE TRANSFER AS DETERMINED UNDER THIS SECTION 13
163	163	IF: 14
164	164
165	165	(1) THE CONSUMER WIRE TRANSF ER WAS INITIATED BY MEA NS 15
166	166	AUTHORIZED BY THE CO NSUMER; AND 16
167	167
168	168	(2) THE MEANS USED TO INITIA TE THE CONSUMER WIRE TRANSFER 17
169	169	WAS ENABLED USING A VERIFICATION MECHA NISM AT THE TIME THE CONS UMER 18
170	170	WIRE TRANSFER WAS IN ITIATED. 19
171	171
172	172	(C) IF A CONSUMER NOTIFIE S THE CONSUMER ’S FINANCIAL INSTITUT ION: 20
173	173
174	174	(1) OF AN UNAUTHORIZED CONS UMER WIRE TRANSFER WITHIN 60 21
175	175	DAYS AFTER THE TRANSMITTAL OF A N ACCOUNT STATEMENT THAT INCLU DES AN 22
176	176	ALLEGEDLY UNAUTHORIZ ED CONSUMER WIRE TRA NSFER, THE CONSUMER IS 23
177	177	LIABLE FOR DAMAGES R ESULTING FROM THE UN AUTHORIZED CONSUMER WIRE 24
178	178	TRANSFER THAT ARE TH E LESSER OF: 25
179	179
180	180	(I) $50; OR 26
181	181
182	182	(II) THE AMOUNT OF THE UNAUTH ORIZED CONSUMER WIR E 27
183	183	TRANSFER; OR 28
184	184
185	185	(2) OF THE LOSS OR THEFT OF A MEANS BY WHICH A C ONSUMER WIRE 29
186	186	TRANSFER MAY BE INIT IATED WITHIN 2 BUSINESS DAYS AFTER THE DISCOVERY OF 30 HOUSE BILL 1156 5
187	187
188	188
189	189	THE LOSS OR THEFT , THE CONSUMER IS LIABLE FOR DAMAGE S RESULTING FROM 1
190	190	THE LOSS OR THEFT TH AT ARE THE LESSER OF: 2
191	191
192	192	(I) $500; OR 3
193	193
194	194	(II) THE AMOUNT OF AN UNAUTHO RIZED CONSUMER WIRE 4
195	195	TRANSFER RESULTING FROM THE L OSS OR THEFT OF THE MEANS BY WHICH A 5
196	196	CONSUMER WIRE TRANSF ER MAY BE INITIATED . 6
197	197
198	198	(D) IF A CONSUMER FAILS T O PROVIDE THE CONSUMER ’S FINANCIAL 7
199	199	INSTITUTION SUFFICIENT NOTICE, THE CONSUMER IS NOT ENTITLED TO 8
200	200	REIMBURSEMENT FOR DA MAGES RESULTING FROM AN UNAUTHORIZED CONS UMER 9
201	201	WIRE TRANSFER . 10
202	202
203	203	(E) A CONSUMER ’S LIABILITY FOR UNAU THORIZED TRANSACTION S THAT 11
204	204	TRIGGER OVERDRAFT PROTECTION SHALL BE DETERMINED EXCLUSIVE LY IN 12
205	205	ACCORDANCE WITH THIS SECTION. 13
206	206
207	207	(F) THIS SECTION MAY NOT BE CONSTRUED TO IMPO SE LIABILITY IN 14
208	208	EXCESS OF THE AMOUNT S IDENTIFIED IN THIS SECTION. 15
209	209
210	210	12–1504. 16
211	211
212	212	NOTICE REQUIRED UNDER THIS SUBTITLE IS NOT SUFFICIENT UNLESS: 17
213	213
214	214	(1) THE CONSUMER TAKES STEPS TO NOTIFY THE CONSUM ER’S 18
215	215	FINANCIAL INSTITUTIO N THAT ARE REASONABL E IN THE ORDINARY CO URSE OF 19
216	216	BUSINESS; 20
217	217
218	218	(2) THE NOTICE ENABLES THE C ONSUMER’S FINANCIAL INSTITUT ION 21
219	219	TO IDENTIFY THE NAME AND ACCOUNT NUMBER O F THE CONSUMER ; 22
220	220
221	221	(3) THE NOTICE INDICATES THAT THE CONSUMER BE LIEVES THAT 23
222	222	THERE IS AN ERROR IN THE ACCOUNT STATEMENT DESCRIBED UNDER § 24
223	223	12–1503(C)(1) OF THIS SUBTITLE; AND 25
224	224
225	225	(4) THE NOTICE IS GIVEN ORAL LY AND IF THE CONSUM ER’S 26
226	226	FINANCIAL INSTITUTIO N REQUESTS W RITTEN NOTICE: 27
227	227
228	228	(I) THE CONSUMER ’S FINANCIAL INSTITUT ION PROVIDES AN 28
229	229	ADDRESS WHERE THE WR ITTEN NOTICE MAY BE SENT; AND 29
230	230	6 HOUSE BILL 1156
231	231
232	232
233	233	(II) THE WRITTEN NOTICE IS RE CEIVED BY THE CONSUM ER’S 1
234	234	FINANCIAL INSTITUTIO N WITHIN 10 BUSINESS DAYS AFTER THE NOTICE IS 2
235	235	REQUESTED. 3
236	236
237	237	12–1505. 4
238	238
239	239	(A) IF A CONSUMER ’S FINANCIAL INSTITUT ION RECEIVES SUFFICIENT 5
240	240	NOTICE OF AN ERROR WITHIN 60 DAYS AFTER TRANSMITTAL OF AN AC COUNT 6
241	241	STATEMENT THAT CONTA INS THE ALLEGED ERRO R, THE CONSUMER ’S FINANCIAL 7
242	242	INSTITUTION SHALL IN ITIATE AN INVESTIGAT ION OF ANY ALLEGED ERROR . 8
243	243
244	244	(B) (1) THE CONSUMER ’S FINANCIAL INSTITUT ION SHALL TRANSMIT A 9
245	245	DECISION RESULTING F ROM AN INVESTIGATION INIT IATED UNDER THIS SEC TION: 10
246	246
247	247	(I) WITHIN 10 BUSINESS DAYS AFTER THE INVESTIGATION WA S 11
248	248	INITIATED; AND 12
249	249
250	250	(II) IF THE CONSUMER ’S FINANCIAL INSTITUTIO N ELECTS TO 13
251	251	PROVISIONALLY CREDIT THE CONSUMER ’S ACCOUNT IN THE AMOUNT OF THE 14
252	252	ERROR ALLEGED , WITHIN 45 BUSINESS DAYS AFTER THE INVESTIGATION WA S 15
253	253	INITIATED. 16
254	254
255	255	(2) IF A CONSUMER ’S FINANCIAL INSTITUT ION ELECTS TO 17
256	256	PROVISIONALLY CREDIT THE CONSUMER’S ACCOUNT UNDER PARAGRAPH (1)(II) OF 18
257	257	THIS SUBSECTION , THE CONSUMER MAY USE ANY FUNDS CREDITED A T ANY TIME 19
258	258	FOR ANY PURPOSE . 20
259	259
260	260	(C) IF AN INVESTIGATION U NDER THIS SECTION RE SULTS IN A DECISION 21
261	261	THAT NO ERROR OCCURR ED: 22
262	262
263	263	(1) THE DECISION SHALL BE TRANSMITTED TO THE C ONSUMER 23
264	264	WITHIN 3 BUSINESS DAYS AFTER THE DECISION IS MADE ; 24
265	265
266	266	(2) ON REQUEST BY THE CON SUMER, THE CONSUMER ’S FINANCIAL 25
267	267	INSTITUTION SHALL TR ANSMIT TO THE CONSUMER COPIES OF ALL RECORD S THE 26
268	268	CONSUMER ’S FINANCIAL INSTITUT ION USED TO MAKE THE DECISION; AND 27
269	269
270	270	(3) THE DECISION SHALL CONTA IN A NOTICE REASONABLY 28
271	271	CALCULATED TO BE UND ERSTANDABLE BY THE C ONSUMER THAT THE CONSUMER 29
272	272	MAY REQUEST RECORDS IN ACCORDANCE WITH ITEM (2) OF THIS SUBSECTION . 30
273	273
274	274	(D) IF AN INVESTIGATION U NDER THIS SECTION RE SULTS IN A DECISION 31
275	275	THAT AN ERROR OCCURR ED: 32 HOUSE BILL 1156 7
276	276
277	277
278	278
279	279	(1) THE DECISION SHALL BE TR ANSMITTED TO THE CON SUMER 1
280	280	WITHIN 1 BUSINESS DAY AFTER T HE DECISION IS MADE ; AND 2
281	281
282	282	(2) THE CONSUMER ’S FINANCIAL INSTITUT ION SHALL CORRECT TH E 3
283	283	ERROR IN ACCORDANCE WITH LIABILITY DETERMINED UNDER § 12–1503 OF THIS 4
284	284	SUBTITLE, INCLUDING ANY INTERE ST THAT WOULD HAVE A CCRUED IF THE FUNDS 5
285	285	HAD NOT BEEN ERRONEO USLY DEBITED FROM TH E CONSUMER ’S ACCOUNT. 6
286	286
287	287	(E) A CONSUMER SHALL BE EN TITLED TO TREBLE DAM AGES IF THE 7
288	288	CONSUMER SHOWS THAT THE CONSU MER’S FINANCIAL INSTITUT ION: 8
289	289
290	290	(1) DID NOT MAKE A GOOD FAIT H INVESTIGATION OF A N ALLEGED 9
291	291	ERROR; 10
292	292
293	293	(2) DID NOT HAVE A REASONABL E BASIS TO BELIEVE T HAT THERE 11
294	294	WAS NO ERROR AND DID NOT PROVISIONALLY CR EDIT THE CONSUMER ’S ACCOUNT 12
295	295	WITHIN 10 DAYS AFTER RECEIPT OF NOTICE OF THE ALL EGED ERROR ; OR 13
296	296
297	297	(3) KNOWINGLY AND WILLFULLY CONCLU DED THAT THE 14
298	298	CONSUMER ’S ACCOUNT WAS NOT IN ERROR AND THE CONCLUSION WAS 15
299	299	UNREASONABLE CONSIDE RING THE EVIDENCE AV AILABLE. 16
300	300
301	301	12–1506. 17
302	302
303	303	(A) IF A CONSUMER ’S FINANCIAL INSTITUT ION FAILS TO COMPLY WITH THIS 18
304	304	SUBTITLE WITH RESPECT T O A CONSUMER OR GROU P OF CONSUMERS : 19
305	305
306	306	(1) (I) FOR AN INDIVIDUAL ACTION , THE CONSUMER ’S FINANCIAL 20
307	307	INSTITUTION SHALL BE LIABLE IN THE AMOUNT : 21
308	308
309	309	1. EXCEPT AS PROVIDED IN ITEM 2 OF THIS ITEM, OF 22
310	310	ANY DAMAGES SUSTAINED BY THE CON SUMER; AND 23
311	311
312	312	2. OF NOT LESS THAN $100 AND NOT MORE THAN 24
313	313	$1,000; AND 25
314	314
315	315	(II) FOR A CLASS ACTION: 26
316	316
317	317	1. NO MINIMUM RECOVERY PER CLAIMANT MAY APPLY ; 27
318	318	8 HOUSE BILL 1156
319	319
320	320
321	321	2. EXCEPT AS PROVIDED IN ITEM 3 OF THIS ITEM, THE 1
322	322	CONSUMER ’S FINANCIAL INSTITU TION SHALL BE LIABLE IN THE AMOUNT THE 2
323	323	COURT MAY ALLOW ; AND 3
324	324
325	325	3. THE TOTAL LIABILITY OF T HE CONSUMER ’S 4
326	326	FINANCIAL INSTITUTIO N MAY NOT BE IN EXCE SS OF THE GREATER OF $500,000 OR 5
327	327	1% OF THE CONSUMER ’S FINANCIAL INSTITUT ION’S NET WORTH; 6
328	328
329	329	(2) IF A VIOLATION IS FOUND BY A COURT , THE CONSUMER ’S 7
330	330	FINANCIAL INSTITUTIO N SHALL BE LIABLE FO R REASONABLE ATTORNE Y’S FEES 8
331	331	ASSOCIATED WITH THE ACTION; AND 9
332	332
333	333	(3) AN AFFIRMATIVE DEFENS E SHALL BE AVAILABLE TO A 10
334	334	CONSUMER ’S FINANCIAL INSTITUT ION WITH RESPECT TO AN ALLEGED ERRO R IF 11
335	335	THE CONSUMER ’S FINANCIAL INSTITUT ION SHOWS, BY A PREPONDERANCE O F THE 12
336	336	EVIDENCE, THAT THE ERROR: 13
337	337
338	338	(I) WAS A GOOD FAITH ERROR REGARDLESS OF ANY 14
339	339	REASONABLE PROCEDURE S IN PLACE DESIGNED TO AVOID SUCH AN ERR OR; AND 15
340	340
341	341	(II) WAS NOT INTENTIONAL . 16
342	342
343	343	(B) IN DETERMINING LIABIL ITY FOR A VIOLATION OF THIS SUBTITLE, A 17
344	344	COURT SHALL CONSIDER : 18
345	345
346	346	(1) THE FREQUENCY AND PERSIS TENCE OF THE VIOLATI ON; 19
347	347
348	348	(2) THE NATURE OF THE VIOLAT ION; 20
349	349
350	350	(3) THE RESOURCES AVAILABLE TO THE DEFENDANT ; 21
351	351
352	352	(4) THE NUMBER OF INDIVIDUAL S ADVERSELY AFFECTED B Y THE 22
353	353	ALLEGED ERROR ; AND 23
354	354
355	355	(5) THE EXTENT TO WHICH THE VIOLATION WAS INTENT IONAL. 24
356	356
357	357	(C) IN AN ACTION TO DETER MINE A CONSUMER ’S LIABILITY FOR A 25
358	358	CONSUMER WIRE TRANSF ER: 26
359	359
360	360	(1) THE CONSUMER ’S FINANCIAL INSTITUT ION SHALL HAVE THE 27
361	361	BURDEN OF PROOF TO SHOW THAT THE CON SUMER WIRE TRANSFER WAS 28
362	362	AUTHORIZED ; AND 29
363	363	HOUSE BILL 1156 9
364	364
365	365
366	366	(2) IF THE CONSUMER WIRE TR ANSFER WAS UNAUTHORI ZED, THE 1
367	367	CONSUMER ’S FINANCIAL INSTITUT ION SHALL HAVE THE BURDE N OF PROOF TO 2
368	368	SHOW THAT THE CONDIT IONS FOR THE CONSUME R’S LIABILITY UNDER § 12–1503 OF 3
369	369	THIS SUBTITLE WERE MET. 4
370	370
371	371	12–1507. 5
372	372
373	373	(A) A CONSUMER MAY NOT WAI VE THE RIGHTS CONFER RED UNDER THIS 6
374	374	SUBTITLE THROUGH ANY ME ANS, INCLUDING THROUGH A CONTRACT. 7
375	375
376	376	(B) THIS SUBTITLE MAY NOT BE CON STRUED TO LIMIT ANY OTHER RIGHTS 8
377	377	OF A CONSUMER. 9
378	378
379	379	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 10
380	380	October 1, 2024. 11