Removing Barriers Blog

Payments Remain Hot Topic in the States
Posted January 21, 2016 by CUNA Advocacy

Yesterday, a chip-and-PIN hearing was held in Michigan’s House Financial Services Committee. Michigan Credit Union League (MCUL) Vice President of Government Affairs, Kirk Hanna, wrote to the committee that while the league supports innovative technology solutions that will bring greater security to the payments industry, chip-and-PIN is not a panacea to prevent fraud and data breaches. Hanna also expressed support for comprehensive data breach legislation that would make all parties subject to same data security standards.

In New York, carryover measures from 2015 requiring chip technology remain pending. Companion bills, NY A 1848 and S 2158, mandate that any credit or debit cards issued by credit unions and other financial institutions have a “smart chip.” The bills define a smart chip as a credit card technology where cards are embedded with chips and a cardholder must put in their PIN or sign for each transaction to be approved. The legislation further notes that the definition includes "chip and PIN" and "chip and signature" as secure methods to protect against card hackers and fraud. Another New York bill, A 8620, goes one step further and requires credit unions and other financial institutions to issue PINs to be used with chip-embedded credit cards.

As data breaches continue to plague the nation, state lawmakers consider new measures to combat these occurrences. In Indiana, H 1357, adds credit card, debit card (with a security code) and financial account numbers to the definition of protected information. The measure also permits the attorney general to initiate civil actions against those who knowingly breach data or contribute to the breach of data. In Nebraska, L 835, requires notice to the attorney general in addition to consumers when a data breach occurs and a Tennessee bill, H 1631, requires notice to individuals affected by breaches within 14 days.  

While no interchange or surcharge bills have been introduced so far in 2016, a number of 2015 measures are eligible for carryover. Among the provisions in a 2015 Massachusetts bill, H 834, is a prohibition of interchange fees on the tax portion of transactions. In New York, A 3368, bans surcharges on debit card transaction. In contrary to the New York bill banning surcharges, Oklahoma legislation, S 369, permits surcharges on certain transactions.