EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1156*
HOUSE BILL 1156
I4, I2 4lr1823
CF SB 930
By: Delegates Stewart and Griffith
Introduced and read first time: February 7, 2024
Assigned to: Economic Matters
A BILL ENTITLED
AN ACT concerning 1
Commercial Law – Consumer Wire Transfers – Liability 2
(Elder Fraud Prevention Act of 2024) 3
FOR the purpose of exempting certain transactions from certain provisions of the Maryland 4
Uniform Commercial Code; limiting a consumer’s liability for damages resulting 5
from certain consumer wire transfers; requiring certain notice to conform to certain 6
requirements in order to be considered sufficient; requiring certain investigations of 7
certain allegations regarding consumer wire transfers; requiring decisions and 8
materials be provided to a consumer in certain circumstances; subjecting certain 9
financial institutions to treble damages under certain circumstances; subjecting 10
certain financial institutions to certain liability for violation of this Act; prohibiting 11
the waiver of rights conferred on a consumer by this Act; exempting certain wire 12
transfers from this Act; and generally relating to consumer wire transfers. 13
BY repealing and reenacting, without amendments, 14
Article – Commercial Law 15
Section 4A–102 16
Annotated Code of Maryland 17
(2013 Replacement Volume and 2023 Supplement) 18
BY repealing and reenacting, with amendments, 19
Article – Commercial Law 20
Section 4A–108 21
Annotated Code of Maryland 22
(2013 Replacement Volume and 2023 Supplement) 23
BY adding to 24
Article – Commercial Law 25
Section 12–1501 through 12–1507 to be under the new subtitle “Subtitle 15. 26
Consumer Wire Transfers” 27
Annotated Code of Maryland 28 2 HOUSE BILL 1156
(2013 Replacement Volume and 2023 Supplement) 1
SECTION 1. BE IT ENACT ED BY THE GENERAL ASSEMBLY OF MARYLAND, 2
That the Laws of Maryland read as follows: 3
Article – Commercial Law 4
4A–102. 5
Except as otherwise provided in § 4A–108 of this subtitle, this title applies to funds 6
transfers defined in § 4A–104 of this subtitle. 7
4A–108. 8
(a) Except as provided in subsection (b) of this section, this title does not apply to 9
a funds transfer [any]: 10
(1) THAT IS A WIRE TRANSFER INITIATED BY AN INDIVIDUAL; OR 11
(2) ANY part of which is governed by the Electronic Fund Transfer Act of 12
1978 (Title XX, Public Law 95–630, 92 Stat. 3728, 15 U.S.C. § 1693 et seq.) as amended 13
from time to time. 14
(b) This title applies to a funds transfer that is [a]: 15
(1) A WIRE TRANSFER INITIATED BY AN INDI VIDUAL, TO THE EXTENT 16
THAT THE PROVISIONS OF THIS TITLE DO NOT CONFLICT WITH THE PR OVISIONS OF 17
TITLE 12, SUBTITLE 15 OF THIS ARTICLE; OR 18
(2) A remittance transfer as defined in the Electronic Fund Transfer Act 19
(15 U.S.C. § 1693o–1) as amended from time to time, unless the remittance transfer is an 20
electronic fund transfer as defined in the Electronic Fund Transfer Act (15 U.S.C. § 1693a) 21
as amended from time to time. 22
(c) In a funds transfer to which this title applies, in the event of an inconsistency 23
between an applicable provision of this title and an applicable provision of the Electronic 24
Fund Transfer Act, the provision of the Electronic Fund Transfer Act governs to the extent 25
of the inconsistency. 26
SUBTITLE 15. CONSUMER WIRE TRANSFERS. 27
12–1501. 28
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANI NGS 29
INDICATED. 30
HOUSE BILL 1156 3
(B) “CONSUMER” MEANS AN INDIVIDUAL . 1
(C) “CONSUMER WIRE TRANSFE R” MEANS A WIRE TRANSFE R THAT IS 2
INITIATED BY A CONSU MER. 3
(D) “CONSUMER’S FINANCIAL INSTITUT ION” MEANS A FINANCIAL 4
INSTITUTION THAT PRO VIDES A CONSUMER WITH AN A CCOUNT AND A MEANS B Y 5
WHICH TO MAKE A CONS UMER WIRE TRANSFER . 6
(E) (1) “ELECTRONIC TERMINAL ” MEANS AN ELECTRONIC DEVICE THAT 7
A CONSUMER MAY USE T O INITIATE A TRANSFER OF FUNDS . 8
(2) “ELECTRONIC TERMINAL ” INCLUDES AN AUTOMATE D TELLER 9
MACHINE, A POINT–OF–SALE TERMINAL , AND A CASH–DISPENSING MACHINE . 10
(F) (1) “ERROR” MEANS AN INACCURACY APPEARING ON A STATE MENT 11
OF A CONSUMER ’S ACCOUNT. 12
(2) “ERROR” INCLUDES: 13
(I) AN UNAUTHORIZED DEBIT ; 14
(II) AN INCORRECT TRANSFER T O OR FROM THE CONSUM ER’S 15
ACCOUNT; 16
(III) OMISSION OF A TRANSACTION THA T SHOULD HAVE BEEN 17
INCLUDED IN THE STAT EMENT; 18
(IV) A COMPUTATIONAL ERROR BY THE CONSUMER ’S FINANCIAL 19
INSTITUTION; 20
(V) A CONSUMER ’S RECEIPT OF AN INCO RRECT AMOUNT FROM 21
AN ELECTRONIC TERMIN AL; AND 22
(VI) ANOTHER ERROR IDENTIFIED BY THE FEDERAL CONSUMER 23
FINANCIAL PROTECTION BUREAU UNDER THE FEDERAL ELECTRONIC FUNDS 24
TRANSFER ACT. 25
(G) “OVERDRAFT PROTECTION ” MEANS AN EXTENSION OF CREDIT BY A 26
CONSUMER ’S FINANCIAL INSTITUT ION TO COVER ANY LIA BILITY INCURRED BY A 27
DEBIT OF THE CONSUME R’S ACCOUNT BY AN AMOU NT IN EXCESS OF THE ACCOUNT 28
BALANCE. 29
4 HOUSE BILL 1156
(H) (1) “VERIFICATION MECHANIS M” MEANS A MEANS BY WHI CH AN 1
INDIVIDUAL’S AUTHORI TY TO INITIATE A CONSUMER WIRE TRANSFER MAY BE 2
CONFIRMED . 3
(2) “VERIFICATION MECHANIS M” INCLUDES VERIFICATIO N BY 4
SIGNATURE, FINGERPRINT, OR A PERSONAL IDENTI FICATION NUMBER . 5
12–1502. 6
THIS SUBTITLE DOES NO T APPLY TO A WIRE TR ANSFER OF WHICH ANY PART 7
IS GOVERNED BY THE FEDE RAL ELECTRONIC FUND TRANSFER ACT. 8
12–1503. 9
(A) EXCEPT AS PROVIDED IN THIS SECTION, A CONSUMER IS NOT LI ABLE 10
FOR DAMAGES RESULTIN G FROM AN UNAUTHORIZ ED CONSUMER WIRE TRA NSFER. 11
(B) A CONSUMER IS LIABLE F OR DAMAGES RESULTING FROM AN 12
UNAUTHORIZED CONSUME R WIRE TRANSFER AS DETERMINED UNDER THIS SECTION 13
IF: 14
(1) THE CONSUMER WIRE TRANSF ER WAS INITIATED BY MEA NS 15
AUTHORIZED BY THE CO NSUMER; AND 16
(2) THE MEANS USED TO INITIA TE THE CONSUMER WIRE TRANSFER 17
WAS ENABLED USING A VERIFICATION MECHA NISM AT THE TIME THE CONS UMER 18
WIRE TRANSFER WAS IN ITIATED. 19
(C) IF A CONSUMER NOTIFIE S THE CONSUMER ’S FINANCIAL INSTITUT ION: 20
(1) OF AN UNAUTHORIZED CONS UMER WIRE TRANSFER WITHIN 60 21
DAYS AFTER THE TRANSMITTAL OF A N ACCOUNT STATEMENT THAT INCLU DES AN 22
ALLEGEDLY UNAUTHORIZ ED CONSUMER WIRE TRA NSFER, THE CONSUMER IS 23
LIABLE FOR DAMAGES R ESULTING FROM THE UN AUTHORIZED CONSUMER WIRE 24
TRANSFER THAT ARE TH E LESSER OF: 25
(I) $50; OR 26
(II) THE AMOUNT OF THE UNAUTH ORIZED CONSUMER WIR E 27
TRANSFER; OR 28
(2) OF THE LOSS OR THEFT OF A MEANS BY WHICH A C ONSUMER WIRE 29
TRANSFER MAY BE INIT IATED WITHIN 2 BUSINESS DAYS AFTER THE DISCOVERY OF 30 HOUSE BILL 1156 5
THE LOSS OR THEFT , THE CONSUMER IS LIABLE FOR DAMAGE S RESULTING FROM 1
THE LOSS OR THEFT TH AT ARE THE LESSER OF: 2
(I) $500; OR 3
(II) THE AMOUNT OF AN UNAUTHO RIZED CONSUMER WIRE 4
TRANSFER RESULTING FROM THE L OSS OR THEFT OF THE MEANS BY WHICH A 5
CONSUMER WIRE TRANSF ER MAY BE INITIATED . 6
(D) IF A CONSUMER FAILS T O PROVIDE THE CONSUMER ’S FINANCIAL 7
INSTITUTION SUFFICIENT NOTICE, THE CONSUMER IS NOT ENTITLED TO 8
REIMBURSEMENT FOR DA MAGES RESULTING FROM AN UNAUTHORIZED CONS UMER 9
WIRE TRANSFER . 10
(E) A CONSUMER ’S LIABILITY FOR UNAU THORIZED TRANSACTION S THAT 11
TRIGGER OVERDRAFT PROTECTION SHALL BE DETERMINED EXCLUSIVE LY IN 12
ACCORDANCE WITH THIS SECTION. 13
(F) THIS SECTION MAY NOT BE CONSTRUED TO IMPO SE LIABILITY IN 14
EXCESS OF THE AMOUNT S IDENTIFIED IN THIS SECTION. 15
12–1504. 16
NOTICE REQUIRED UNDER THIS SUBTITLE IS NOT SUFFICIENT UNLESS: 17
(1) THE CONSUMER TAKES STEPS TO NOTIFY THE CONSUM ER’S 18
FINANCIAL INSTITUTIO N THAT ARE REASONABL E IN THE ORDINARY CO URSE OF 19
BUSINESS; 20
(2) THE NOTICE ENABLES THE C ONSUMER’S FINANCIAL INSTITUT ION 21
TO IDENTIFY THE NAME AND ACCOUNT NUMBER O F THE CONSUMER ; 22
(3) THE NOTICE INDICATES THAT THE CONSUMER BE LIEVES THAT 23
THERE IS AN ERROR IN THE ACCOUNT STATEMENT DESCRIBED UNDER § 24
12–1503(C)(1) OF THIS SUBTITLE; AND 25
(4) THE NOTICE IS GIVEN ORAL LY AND IF THE CONSUM ER’S 26
FINANCIAL INSTITUTIO N REQUESTS W RITTEN NOTICE: 27
(I) THE CONSUMER ’S FINANCIAL INSTITUT ION PROVIDES AN 28
ADDRESS WHERE THE WR ITTEN NOTICE MAY BE SENT; AND 29
6 HOUSE BILL 1156
(II) THE WRITTEN NOTICE IS RE CEIVED BY THE CONSUM ER’S 1
FINANCIAL INSTITUTIO N WITHIN 10 BUSINESS DAYS AFTER THE NOTICE IS 2
REQUESTED. 3
12–1505. 4
(A) IF A CONSUMER ’S FINANCIAL INSTITUT ION RECEIVES SUFFICIENT 5
NOTICE OF AN ERROR WITHIN 60 DAYS AFTER TRANSMITTAL OF AN AC COUNT 6
STATEMENT THAT CONTA INS THE ALLEGED ERRO R, THE CONSUMER ’S FINANCIAL 7
INSTITUTION SHALL IN ITIATE AN INVESTIGAT ION OF ANY ALLEGED ERROR . 8
(B) (1) THE CONSUMER ’S FINANCIAL INSTITUT ION SHALL TRANSMIT A 9
DECISION RESULTING F ROM AN INVESTIGATION INIT IATED UNDER THIS SEC TION: 10
(I) WITHIN 10 BUSINESS DAYS AFTER THE INVESTIGATION WA S 11
INITIATED; AND 12
(II) IF THE CONSUMER ’S FINANCIAL INSTITUTIO N ELECTS TO 13
PROVISIONALLY CREDIT THE CONSUMER ’S ACCOUNT IN THE AMOUNT OF THE 14
ERROR ALLEGED , WITHIN 45 BUSINESS DAYS AFTER THE INVESTIGATION WA S 15
INITIATED. 16
(2) IF A CONSUMER ’S FINANCIAL INSTITUT ION ELECTS TO 17
PROVISIONALLY CREDIT THE CONSUMER’S ACCOUNT UNDER PARAGRAPH (1)(II) OF 18
THIS SUBSECTION , THE CONSUMER MAY USE ANY FUNDS CREDITED A T ANY TIME 19
FOR ANY PURPOSE . 20
(C) IF AN INVESTIGATION U NDER THIS SECTION RE SULTS IN A DECISION 21
THAT NO ERROR OCCURR ED: 22
(1) THE DECISION SHALL BE TRANSMITTED TO THE C ONSUMER 23
WITHIN 3 BUSINESS DAYS AFTER THE DECISION IS MADE ; 24
(2) ON REQUEST BY THE CON SUMER, THE CONSUMER ’S FINANCIAL 25
INSTITUTION SHALL TR ANSMIT TO THE CONSUMER COPIES OF ALL RECORD S THE 26
CONSUMER ’S FINANCIAL INSTITUT ION USED TO MAKE THE DECISION; AND 27
(3) THE DECISION SHALL CONTA IN A NOTICE REASONABLY 28
CALCULATED TO BE UND ERSTANDABLE BY THE C ONSUMER THAT THE CONSUMER 29
MAY REQUEST RECORDS IN ACCORDANCE WITH ITEM (2) OF THIS SUBSECTION . 30
(D) IF AN INVESTIGATION U NDER THIS SECTION RE SULTS IN A DECISION 31
THAT AN ERROR OCCURR ED: 32 HOUSE BILL 1156 7
(1) THE DECISION SHALL BE TR ANSMITTED TO THE CON SUMER 1
WITHIN 1 BUSINESS DAY AFTER T HE DECISION IS MADE ; AND 2
(2) THE CONSUMER ’S FINANCIAL INSTITUT ION SHALL CORRECT TH E 3
ERROR IN ACCORDANCE WITH LIABILITY DETERMINED UNDER § 12–1503 OF THIS 4
SUBTITLE, INCLUDING ANY INTERE ST THAT WOULD HAVE A CCRUED IF THE FUNDS 5
HAD NOT BEEN ERRONEO USLY DEBITED FROM TH E CONSUMER ’S ACCOUNT. 6
(E) A CONSUMER SHALL BE EN TITLED TO TREBLE DAM AGES IF THE 7
CONSUMER SHOWS THAT THE CONSU MER’S FINANCIAL INSTITUT ION: 8
(1) DID NOT MAKE A GOOD FAIT H INVESTIGATION OF A N ALLEGED 9
ERROR; 10
(2) DID NOT HAVE A REASONABL E BASIS TO BELIEVE T HAT THERE 11
WAS NO ERROR AND DID NOT PROVISIONALLY CR EDIT THE CONSUMER ’S ACCOUNT 12
WITHIN 10 DAYS AFTER RECEIPT OF NOTICE OF THE ALL EGED ERROR ; OR 13
(3) KNOWINGLY AND WILLFULLY CONCLU DED THAT THE 14
CONSUMER ’S ACCOUNT WAS NOT IN ERROR AND THE CONCLUSION WAS 15
UNREASONABLE CONSIDE RING THE EVIDENCE AV AILABLE. 16
12–1506. 17
(A) IF A CONSUMER ’S FINANCIAL INSTITUT ION FAILS TO COMPLY WITH THIS 18
SUBTITLE WITH RESPECT T O A CONSUMER OR GROU P OF CONSUMERS : 19
(1) (I) FOR AN INDIVIDUAL ACTION , THE CONSUMER ’S FINANCIAL 20
INSTITUTION SHALL BE LIABLE IN THE AMOUNT : 21
1. EXCEPT AS PROVIDED IN ITEM 2 OF THIS ITEM, OF 22
ANY DAMAGES SUSTAINED BY THE CON SUMER; AND 23
2. OF NOT LESS THAN $100 AND NOT MORE THAN 24
$1,000; AND 25
(II) FOR A CLASS ACTION: 26
1. NO MINIMUM RECOVERY PER CLAIMANT MAY APPLY ; 27
8 HOUSE BILL 1156
2. EXCEPT AS PROVIDED IN ITEM 3 OF THIS ITEM, THE 1
CONSUMER ’S FINANCIAL INSTITU TION SHALL BE LIABLE IN THE AMOUNT THE 2
COURT MAY ALLOW ; AND 3
3. THE TOTAL LIABILITY OF T HE CONSUMER ’S 4
FINANCIAL INSTITUTIO N MAY NOT BE IN EXCE SS OF THE GREATER OF $500,000 OR 5
1% OF THE CONSUMER ’S FINANCIAL INSTITUT ION’S NET WORTH; 6
(2) IF A VIOLATION IS FOUND BY A COURT , THE CONSUMER ’S 7
FINANCIAL INSTITUTIO N SHALL BE LIABLE FO R REASONABLE ATTORNE Y’S FEES 8
ASSOCIATED WITH THE ACTION; AND 9
(3) AN AFFIRMATIVE DEFENS E SHALL BE AVAILABLE TO A 10
CONSUMER ’S FINANCIAL INSTITUT ION WITH RESPECT TO AN ALLEGED ERRO R IF 11
THE CONSUMER ’S FINANCIAL INSTITUT ION SHOWS, BY A PREPONDERANCE O F THE 12
EVIDENCE, THAT THE ERROR: 13
(I) WAS A GOOD FAITH ERROR REGARDLESS OF ANY 14
REASONABLE PROCEDURE S IN PLACE DESIGNED TO AVOID SUCH AN ERR OR; AND 15
(II) WAS NOT INTENTIONAL . 16
(B) IN DETERMINING LIABIL ITY FOR A VIOLATION OF THIS SUBTITLE, A 17
COURT SHALL CONSIDER : 18
(1) THE FREQUENCY AND PERSIS TENCE OF THE VIOLATI ON; 19
(2) THE NATURE OF THE VIOLAT ION; 20
(3) THE RESOURCES AVAILABLE TO THE DEFENDANT ; 21
(4) THE NUMBER OF INDIVIDUAL S ADVERSELY AFFECTED B Y THE 22
ALLEGED ERROR ; AND 23
(5) THE EXTENT TO WHICH THE VIOLATION WAS INTENT IONAL. 24
(C) IN AN ACTION TO DETER MINE A CONSUMER ’S LIABILITY FOR A 25
CONSUMER WIRE TRANSF ER: 26
(1) THE CONSUMER ’S FINANCIAL INSTITUT ION SHALL HAVE THE 27
BURDEN OF PROOF TO SHOW THAT THE CON SUMER WIRE TRANSFER WAS 28
AUTHORIZED ; AND 29
HOUSE BILL 1156 9
(2) IF THE CONSUMER WIRE TR ANSFER WAS UNAUTHORI ZED, THE 1
CONSUMER ’S FINANCIAL INSTITUT ION SHALL HAVE THE BURDE N OF PROOF TO 2
SHOW THAT THE CONDIT IONS FOR THE CONSUME R’S LIABILITY UNDER § 12–1503 OF 3
THIS SUBTITLE WERE MET. 4
12–1507. 5
(A) A CONSUMER MAY NOT WAI VE THE RIGHTS CONFER RED UNDER THIS 6
SUBTITLE THROUGH ANY ME ANS, INCLUDING THROUGH A CONTRACT. 7
(B) THIS SUBTITLE MAY NOT BE CON STRUED TO LIMIT ANY OTHER RIGHTS 8
OF A CONSUMER. 9
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 10
October 1, 2024. 11