Print Print
  • PART I ADMINISTRATION OF THE GOVERNMENT
  • TITLE XXII CORPORATIONS
  • CHAPTER 167B ELECTRONIC BRANCHES AND ELECTRONIC FUND TRANSFERS
  • Section 1 Definitions

Section 1. The following words as used in this chapter, unless the context otherwise requires, shall have the following meanings:—

“Accepted access device”, an access device to a consumer’s account for the purpose of initiating electronic fund transfers when the consumer to whom such card, code, or other means of access was issued has requested, received and signed a receipt for, or has signed, or has used, or authorized another to use such card, code, or other means of access for the purpose of transferring money between accounts or obtaining money, property, labor or services.

“Access device”, a card, code, or other means of access or any combination thereof, other than a check, draft or similar paper instrument, by the use of which a consumer may initiate an electronic fund transfer.

“Account”, demand deposit, negotiable withdrawal order account, savings deposit, share account or other consumer asset account, other than an occasional or incidental credit balance in an open end credit plan as defined in chapter one hundred and forty D, established primarily for personal, family or household purposes, but such term does not include an account held by a financial institution pursuant to a bona fide trust agreement.

“Bank”, any association or corporation chartered by the commonwealth under the provisions of chapter one hundred and sixty-eight, one hundred and seventy, one hundred and seventy-one, or one hundred and seventy-two or any individuals, association, partnership or corporation incorporated or doing a banking business in the commonwealth, subject to the supervision of the commissioner.

“Board”, the board of governors of the Federal Reserve System.

“Business day”, any day on which the offices of the consumer’s financial institution involved in an electronic fund transfer are open to the public for carrying on substantially all of its business functions.

“Central routing unit”, a facility where electronic impulses or other indicia of a transaction originating at an electronic branch are received and are routed and transmitted to a financial institution, or to a data processing center, or to another central routing unit, wherever located.

“Commissioner”, the commissioner of banks.

“Consumer”, a natural person.

“Data processing center”, a facility, wherever located, at which electronic impulses or other indicia of a transaction originating at an electronic branch are received and are processed in order to enable the electronic branch to perform any authorized function.

“Electronic branch”, an electronic device, other than a telephone operated by a consumer, through which a consumer may initiate an electronic fund transfer. Such term includes, but is not limited to automated teller machines and cash dispensing machines. Such term does not include a teller machine or similar device located on the premises of and operated solely by an employee of a financial institution or a point-of-sale terminal as hereinafter defined. An electronic branch shall not be considered a branch in chapters one hundred and sixty-eight, one hundred and seventy, one hundred and seventy-one, one hundred and seventy-two and one hundred and seventy-two A.

“Electronic fund transfer”, any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic branch telephone instrument, or computer or magnetic tape or point-of-sale terminal so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, direct deposits or withdrawals of funds, and transfers initiated by telephone. Such term shall not include:

(a) check guarantee or authorization service which does not directly result in a debit or credit to a consumer’s account.

(b) any transfer of funds, other than those processed by automated clearinghouse, made by a financial institution on behalf of a consumer by means of a service that transfers funds held at either Federal Reserve banks or other depository institutions and which is not designed primarily to transfer funds on behalf of a consumer.

(c) any transfer, the primary purpose of which is the purchase or sale of securities or commodities regulated by the Securities and Exchange Commission or the Commodities Futures Trading Commission.

(d) any transfer under an agreement between a consumer and a financial institution which provides that the institution will initiate individual transfers without a specific request from the consumer, (1) between a consumer’s accounts within the financial institution, such as a transfer from a checking account to a savings account; (2) into a consumer’s account by the financial institution, such as the crediting of interest to a savings account, provided that the financial institution shall be subject to clause (2) of section seven and sections twenty and twenty-one; or (3) from a consumer’s account to an account of the financial institution, such as a loan payment, provided that the financial institution shall be subject to clause (1) of section seven and sections twenty and twenty-one.

(e) any transfer of funds which is initiated by a telephone conversation between a consumer and an officer or employee of a financial institution which is not pursuant to a prearranged plan and under which periodic or recurring transfers are not contemplated.

“Error”, an error consists of:

(1) an unauthorized electronic fund transfer;

(2) an incorrect electronic fund transfer from or to the consumer’s account;

(3) the omission from a periodic statement of an electronic fund transfer affecting the consumer’s account which should have been included;

(4) a computational error by the financial institution;

(5) the consumer’s receipt of an incorrect amount of money from an electronic branch;

(6) a consumer’s request for additional information or clarification concerning an electronic fund transfer or any documentation required by this chapter; or

(7) any other error described in regulations of the commissioner.

“Federal bank”, a national banking association, savings and loan association or savings bank which exists by authority of the United States, the main office of which is located in the commonwealth.

“Foreign bank”, any association or corporation authorized to do a banking business the main office of which is located outside the commonwealth and which exists by authority of a country other than the United States.

“Financial institution”, a bank, federal bank, federal credit union, foreign bank, out-of-state bank, out-of-state federal bank or any other person who (a) directly or indirectly holds an account belonging to a consumer, or (b) issues an access device and agrees with a consumer to provide electronic fund transfer services; provided, however, that said term shall mean a bank for the purposes of the first, second and third paragraphs of section 3 and for the purposes of section 4.

“Out-of-state bank”, any association or corporation authorized to do a banking business the main office of which is located outside the commonwealth and which exists by authority of any state of the United States other than the commonwealth.

“Out-of-state federal bank”, a national banking association, savings and loan association or savings bank which exists by authority of the United States the main office of which is located outside the commonwealth.

“Merchant”, any person, corporation, association, partnership or other entity which provides a location for a point-of-sale terminal and contracts with a financial institution or an approved organization for electronic fund transfer services.

“Office”, shall mean a main office or branch office as authorized in chapters one hundred and sixty-eight, one hundred and seventy, one hundred and seventy-one, one hundred and seventy-two, and one hundred and seventy-two A or under applicable federal law or regulation. An electronic branch shall not be considered an office.

“Official board interpretation”, a formal interpretation issued by the board and designated by the board as constituting an official board interpretation.

“Official staff interpretation”, an interpretation issued by an official duly authorized by the board to issue such interpretation, and designated by the official as constituting an official staff interpretation.

“Organization”, any person, corporation, association of partnership which assists or provides services to a financial institution or merchant in order to make available electronic fund transfers. A financial institution or merchant shall not be considered an organization.

“Point-of-sale terminal”, an electronic terminal located on the premises of a merchant when such terminal is used with the assistance of an employee of a merchant for a customer’s purchase or lease of goods or services sold or leased by such merchant or adjustments thereto or the receipt of cash by the customer which is ancillary to the customer’s purchase or lease of goods or services from such merchant; provided, however, that such terminal shall be deemed an electronic branch for the purposes of this chapter whenever it is used for any other electronic fund transfer, or for an electronic fund transfer involving a customer’s account held by an organization, or for an electronic fund transfer solely for customers of a single financial institution or bank holding company subject to the provisions of chapter one hundred and sixty-seven A or the Bank Holding Company Act of 1956, 12 USC 1841 et seq.

“Preauthorized electronic fund transfers”, an electronic fund transfer authorized in advance to recur at substantially regular intervals.

“Unauthorized electronic fund transfer”, an electronic fund transfer from a consumer’s account initiated by a person other than the consumer without actual authority to initiate such transfer and from which the consumer receives no benefit, but the term does not include any electronic fund transfer (a) initiated by a person other than the consumer who was intentionally furnished with the access device to such a consumer’s account by such a consumer unless the consumer has notified the financial institution involved that transfers by such other person are no longer authorized, (b) initiated with fraudulent intent by the consumer or any person acting in concert with the consumer.