Senate Banking Committee Approves Chip and PIN Measure

General information

Last week, the Senate Committee on Banking and Financial Institutions approved Senate Bill 1351 (Hill), which requires payment card issuers to issue credit and debit cards with microchips that are PIN enabled by October 1, 2015. It also requires retailers to accept these cards for payment by the same date. The bill disregards the requirement by the payment card networks that encourages issuers to issue and retailers to accept microchip cards without the PIN requirement by October 1, 2015. CBA strongly opposed the bill because it interferes with efforts to roll out chip enabled cards on a national level. By requiring a PIN mandate, the measure sets in statute a specific fraud prevention technology that does not allow for a dynamic method for combatting fraud. Although the California Retailers Association supported the bill, CBA was joined in opposition by the National Federation of Independent Businesses, the California Chamber of Commerce, the California Restaurant Association and the California Hotel and Lodging Association. The California Independent Bankers raised concerns, but did not oppose the bill. CBA believes this measure negatively impacts banks of all sizes, creates substantial costs to the industry and our customers, increases compliance risk and heightens legal exposure. 

The bill now moves to the Senate Committee on Judiciary for their consideration in the next couple of weeks where a growing business coalition will oppose the bill. Please contact CBA’s vice president of state government relations, Alex Alanis, at or (916)438-4411 if you have any questions regarding this measure.