WASHINGTON – Sens. Mark Warner, D-Va., and Mark Kirk, R-Ill., unveiled legislation on April 2 to increase fraud protections for debit card customers.

The Consumer Debit Card Protection Act would lower the personal liability cap for debit cards to $50 for unauthorized charges, down from more than $500, putting it in line with federal regulations for credit cards. The legislation comes on the heels of the massive data breach at Target, which exposed credit and debit card information for millions of customers during the holiday season.

Lawmakers in the House and Senate have responded by holding numerous hearings examining the likelihood of future data breaches and about the safety of the payments system, debating the need for updated card technology and enhanced data security standards.

The incident has also shed new light on longstanding concerns about the legal protections available for debit card holders. Warner previously warned about a lack of debit card protections during a February hearing held by the Senate Banking Committee's national security and international trade and finance subcommittee in the wake of the Target breach. Consumer advocates have sounded alarms on the issue as well.

"Debit card use has just exploded in recent years, especially among young people, and consumer protections must keep pace," Warner said in a press release. "Debit cards are used in much the same way as credit cards, so it makes no sense for credit card fraud liability to be capped at $50 while debit cardholders can find themselves on the hook for $500 or more."

For all their similarities, credit and debit cards are regulated under different federal laws that determine a consumer's liability for unauthorized transactions. The new legislation would extend to debit card holders some of the same protections available to credit card holders, reducing the liability cap and shortening the time required to credit a consumer's account after a disputed debit card transaction to seven days from ten days.    

"In light of the millions of consumers who have had their financial information stolen during one of the recent data breaches, Sen. Warner and I will continue to take data security and the importance of consumer protections very seriously," Kirk said the release. "This legislation ensures that our federal statutes for debit card protections are on par with those of credit cards, and will help consumers keep their wallets safe."

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