Texas House Bill HB1771

Texas 2009 - 81st Regular

• Out of House Committee: 4/21/09
• Voted on by House: 5/2/09

Caption

Relating to the reduction in value or abandonment of stored value cards.

Impact

The implementation of HB 1771 would reinforce consumer rights by ensuring that individuals are fully informed about the terms and conditions associated with stored value cards. By restricting the ability of issuers to levy fees that could diminish the card's value, the legislation aims to protect consumers from potential exploitation. Furthermore, the bill applies to all stored value cards issued or activated after the effective date, while preserving the regulations for cards sold prior to this date, thus ensuring a smooth transition for both consumers and businesses.

Summary

House Bill 1771 addresses issues related to stored value cards, focusing specifically on the reduction in value or abandonment of these cards. The bill seeks to amend multiple sections of the Business and Commerce Code to provide clearer guidelines and protections for consumers purchasing stored value cards. Key provisions include prohibiting issuers from imposing certain fees, such as handling fees or periodic fees that would decrease the unredeemed balance over time. Moreover, the bill requires that any material restrictions, including expiration dates or fees, must be disclosed clearly at the time of sale or issuance of the card.

Contention

While proponents argue that the bill enhances consumer protection in the marketplace, critics may raise concerns regarding the potential impact on businesses that issue these cards. There may be worries about how these restrictions could affect the offerings of financial institutions and retailers who rely on stored value cards as a part of their business models. Additionally, the balance between regulation and the operational flexibility for card issuers stands as a central point of discussion, with varying opinions on whether the proposed changes could stifle innovation in card services.