Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

CHAPTER 108--H.F.No. 1758

An act

relating to commerce; regulating access devices; establishing liability for security breaches; providing enforcement powers;

proposing coding for new law in Minnesota Statutes, chapter 325E.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [325E.64] ACCESS DEVICES; BREACH OF SECURITY. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms defined in this subdivision have the meanings given them. new text end

new text begin (b) "Access device" means a card issued by a financial institution that contains a magnetic stripe, microprocessor chip, or other means for storage of information which includes, but is not limited to, a credit card, debit card, or stored value card. new text end

new text begin (c) "Breach of the security of the system" has the meaning given in section 325E.61, subdivision 1, paragraph (d). new text end

new text begin (d) "Card security code" means the three-digit or four-digit value printed on an access device or contained in the microprocessor chip or magnetic stripe of an access device which is used to validate access device information during the authorization process. new text end

new text begin (e) "Financial institution" means any office of a bank, bank and trust, trust company with banking powers, savings bank, industrial loan company, savings association, credit union, or regulated lender. new text end

new text begin (f) "Microprocessor chip data" means the data contained in the microprocessor chip of an access device. new text end

new text begin (g) "Magnetic stripe data" means the data contained in the magnetic stripe of an access device. new text end

new text begin (h) "PIN" means a personal identification code that identifies the cardholder. new text end

new text begin (i) "PIN verification code number" means the data used to verify cardholder identity when a PIN is used in a transaction. new text end

new text begin (j) "Service provider" means a person or entity that stores, processes, or transmits access device data on behalf of another person or entity. new text end

new text begin Subd. 2. new text end

new text begin Security or identification information; retention prohibited. new text end

new text begin No person or entity conducting business in Minnesota that accepts an access device in connection with a transaction shall retain the card security code data, the PIN verification code number, or the full contents of any track of magnetic stripe data, subsequent to the authorization of the transaction or in the case of a PIN debit transaction, subsequent to 48 hours after authorization of the transaction. A person or entity is in violation of this section if its service provider retains such data subsequent to the authorization of the transaction or in the case of a PIN debit transaction, subsequent to 48 hours after authorization of the transaction. new text end

new text begin Subd. 3. new text end

new text begin Liability. new text end

new text begin Whenever there is a breach of the security of the system of a person or entity that has violated this section, or that person's or entity's service provider, that person or entity shall reimburse the financial institution that issued any access devices affected by the breach for the costs of reasonable actions undertaken by the financial institution as a result of the breach in order to protect the information of its cardholders or to continue to provide services to cardholders, including but not limited to, any cost incurred in connection with: new text end

new text begin (1) the cancellation or reissuance of any access device affected by the breach; new text end

new text begin (2) the closure of any deposit, transaction, share draft, or other accounts affected by the breach and any action to stop payments or block transactions with respect to the accounts; new text end

new text begin (3) the opening or reopening of any deposit, transaction, share draft, or other accounts affected by the breach; new text end

new text begin (4) any refund or credit made to a cardholder to cover the cost of any unauthorized transaction relating to the breach; and new text end

new text begin (5) the notification of cardholders affected by the breach. new text end

new text begin The financial institution is also entitled to recover costs for damages paid by the financial institution to cardholders injured by a breach of the security of the system of a person or entity that has violated this section. Costs do not include any amounts recovered from a credit card company by a financial institution. The remedies under this subdivision are cumulative and do not restrict any other right or remedy otherwise available to the financial institution. new text end

new text begin EFFECTIVE DATES; APPLICATION. new text end

new text begin Subdivisions 1 and 2 are effective August 1, 2007. Subdivision 3 is effective August 1, 2008, and applies to breaches of the security of a system occurring on or after that date. new text end

Presented to the governor May 18, 2007

Signed by the governor May 21, 2007, 2:58 p.m.

Official Publication of the State of Minnesota
Revisor of Statutes