§ 527.5 — Satellite terminal requirements

Iowa § 527.5

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 527: ELECTRONIC TRANSFER OF FUNDS

Text

A satellite terminal may be utilized by a financial institution to the extent permitted in
this chapter only if the satellite terminal is utilized and maintained in compliance with the
provisions of this chapter and only if all of the following are complied with:
1. A satellite terminal in this state may be established by one or more financial
institutions. The establishing financial institutions shall designate a single controlling
financial institution which shall maintain the location, use, and operation of the satellite
terminal, wherever located, in compliance with this chapter. The use and operation of a
satellite terminal shall be governed by a written agreement between the controlling financial
institution and the person controlling the physical location at which the satellite terminal
is placed. The written agreement shall specify all of the terms and conditions, including
any fees and charges, under which the satellite terminal is placed at that location. If the
satellite terminal is a multiple use terminal, the written agreement shall specify, and may
limit, the specific types of transactions incidental to the conduct of the business of a financial
institution which may be engaged in through that terminal.
2. a. A satellite terminal shall be available for use on a nondiscriminatory basis by any
other financial institution which has its principal place of business within this state, and by
all customers who have been designated by a financial institution using the satellite terminal
and who have been provided with an access device, approved by the administrator, by which
to engage in electronic transactions by means of the satellite terminal.
b. For the purposes of complying with paragraph “a”, an on-line point-of-sale terminal is
not required to be available for use by customers of a financial institution by means of an
access device by which an off-line point-of-sale terminal can be used to engage in electronic
transactions.
c. All off-line point-of-sale terminals located at the retail location or retail locations within
this state of a single retailer are exempt from paragraph “a” if electronic transactions can be
initiated at each of such terminals only by an access device unique to the retailer.
d. Paragraph “a” applies to a financial institution whose licensed or principal place of
business is located in a state other than Iowa, whether or not the financial institution has
a business location in this state, if all satellite terminals or other similar type terminals
owned, controlled, operated, or maintained by the financial institution, wherever located,
are available on a reciprocal basis to each financial institution with a principal place of
business in this state and to each financial institution with a business location in this state
which complies with this paragraph, and to all customers who have been designated by any
such financial institution using the satellite terminal and who have been provided with an
access device.
3. a. An informational statement shall be filed and shall be maintained on a current basis
with the administrator by the financial institution controlling a satellite terminal in this state,
which sets forth all of the following:
(1) The name and business address of the controlling financial institution.
(2) The location of the satellite terminal.
(3) A schedule of the charges which will be required to be paid by a financial institution
utilizing the satellite terminal.
(4) An agreement with the administrator that the financial institution controlling the
satellite terminal will maintain that satellite terminal in compliance with this chapter.
b. The informational statement shall be accompanied by a copy of the written agreement
required by subsection 1. The informational statement also shall be accompanied by a
statement or copy of any agreement, whether oral or in writing, between the controlling
financial institution and a data processing center or a central routing unit, unless operated by

or solely on behalf of the controlling financial institution, by which transactions originating
at that terminal will be received.
4. A satellite terminal in this state shall not be attended or operated at any time by an
employee of a financial institution or an affiliate of a financial institution, except for the
purpose of instructing customers, on a temporary basis, in the use of the satellite terminal,
for the purpose of testing the terminal, or for the purpose of transacting business on the
employee’s own behalf.
5. A satellite terminal shall bear a sign or label no larger than three inches by two inches
identifying the name, address, and telephone number of the owner of the satellite terminal.
The administrator may authorize methods of identification the administrator deems
necessary to enable the general public to determine the accessibility of a satellite terminal.
6. The charges required to be paid by any financial institution which utilizes the satellite
terminal for transactions involving an access device shall not exceed a pro rata portion
of the costs, determined in accordance with generally accepted accounting principles, of
establishing, operating and maintaining the satellite terminal, plus a reasonable return on
these costs to the owner of the satellite terminal.
7. If the administrator deems the informational statement or any amendment to that
statement or amendment to be complete and finds no grounds for denying establishment
of a satellite terminal, the administrator may notify the person filing the informational
statement that the administrator has expressly approved the establishment and operation
of the satellite terminal as described in the informational statement or amendment and
according to the agreements attached to the statement or amendment. Operation of
the satellite terminal may commence immediately upon a person receiving such express
approval from the administrator. If the administrator finds grounds, under any applicable
law or rule, for denying establishment of a satellite terminal the administrator shall notify
the person filing the informational statement or an amendment thereto, within thirty days
of the filing thereof, of the existence of such grounds. If such notification is not given by
the administrator, the administrator shall be considered to have expressly approved the
establishment and operation of the satellite terminal as described in the informational
statement or amendment and according to the agreements attached thereto, and operation
of the satellite terminal in accordance therewith may commence on or after the thirtieth
day following such filing. However, this subsection shall not be construed to prohibit the
administrator from enforcing the provisions of this chapter, nor shall it be construed to
constitute a waiver of any prohibition, limitation, or obligation imposed by this chapter.
8. a. Satellite terminals located in this state shall be directly connected to either of the
following:
(1) A central routing unit approved pursuant to this chapter.
(2) Adataprocessingcenterwhichisdirectlyconnectedtoacentralroutingunitapproved
pursuant to this chapter.
b. If a data processing center which is directly connected to a satellite terminal located
in this state does not authorize or reject a transaction originated at that terminal, the
transaction shall be immediately transmitted by the data processing center to a central
routing unit approved pursuant to this chapter, unless one of the following applies:
(1) The transaction is not authorized because of a mechanical failure of the data
processing center or satellite terminal.
(2) Thetransactiondoesnotaffectacustomerassetaccountheldbyafinancialinstitution.
c. This subsection does not limit the authority of a data processing center to authorize or
rejecttransactionsrequestedbycustomersofafinancialinstitutionpursuanttoanagreement
whereby the data processing center authorizes or rejects requested transactions on behalf of
the financial institution and provides to the financial institution, on a batch basis and not
on an on-line real time basis, information concerning authorized or rejected transactions of
customers of the financial institution.
9. A personal terminal may be utilized by a financial institution to the extent permitted
by this chapter if the use and operation of the personal terminal is governed by a written
agreement between the controlling financial institution and its customer and if the personal
terminal is utilized and maintained in compliance with subsection 8 and all other applicable

sections of this chapter. A telephone located at other than a personal residence and used
primarily as a personal terminal must be utilized and maintained in compliance with this
section.
10. Any person, as defined in section 4.1, subsection 20, establishing a limited-function
terminal within this state, except for a multiple use terminal, which is utilized to initiate
transactions affecting a customer asset account shall file with the administrator and
shall maintain on a current basis a registration statement on a form prescribed by the
administrator containing the name and address of the registrant, the location of the
limited-function terminal, and any other information the administrator deems relevant. All
limited-function terminals established in this state prior to July 1, 1991, shall be registered
in a similar manner by the establishing person no later than July 1, 1992.
11. a. If at any time, a limited-function terminal at a location in this state off the premises
of the financial institution is replaced by a device constituting either an on-line or an off-line
point-of-sale terminal which may be utilized to initiate transactions which affect customer
asset accounts through the use of an electronic personal identifier, or is upgraded, altered, or
modified to be operated in a manner which allows the use of an electronic personal identifier
to initiate transactions which affect customer asset accounts, or an on-line or an off-line
point-of-sale terminal which may be utilized to initiate transactions which affect customer
asset accounts through the use of an electronic personal identifier is newly established at a
location in this state off the premises of the financial institution, then such upgraded, altered,
or modified limited-function terminal or replacement point-of-sale terminal or such newly
established point-of-sale terminal is deemed to be a full-function point-of-sale terminal for
purposes of this subsection and all requirements of a satellite terminal in this chapter apply
to the full-function point-of-sale terminal with regard to all transactions affecting customer
asset accounts which are initiated through the use of an electronic personal identifier, except
for section 527.4, subsection 3, and subsections 1, 3, and 7 of this section.
b. A full-function point-of-sale terminal, as identified in paragraph “a”, which is operated
in a manner which permits all access devices to be utilized to initiate transactions which
affect customer asset accounts, and where all such transactions can be directly routed for
authorization purposes as established in this subsection, is also exempt from the provisions
of subsection 8. However, if a data processing center directly connected to such full-function
point-of-sale terminal does not authorize or reject a transaction affecting a customer asset
account initiated at the terminal through the use of an electronic personal identifier, the
transaction shall be immediately transmitted by the data processing center to either of the
following:
(1) A central routing unit approved pursuant to this chapter.
(2) An electronic funds transfer processing facility maintained or operated by a national
card association and utilized for the processing of transactions initiated through the use of
electronic funds transfer transaction cards or access devices depicting a service mark, logo,
or trademark associated with the national card association. However, if the national card
association’s processing facility is unable to immediately authorize or reject a transaction
affecting a customer asset account initiated at that terminal through the use of an access
device which bears a service mark, logo, or trademark associated with a central routing
unit approved pursuant to this chapter but does not bear a service mark, logo, or trademark
associated with a national card association, or which bears a service mark, logo, or
trademark other than that associated with either a central routing unit approved pursuant to
this chapter or a national card association, the transaction shall be immediately transmitted
to a central routing unit approved pursuant to this chapter, whether the transaction initiated
through the use of such access device was transmitted to the national card association’s
processing facility by a data processing center directly connected to the full-function
point-of-sale terminal, or the national card association’s processing facility received the
transmission of transaction data directly from the full-function point-of-sale terminal.
c. If the national card association’s electronic funds transfer processing facility directly or
indirectly receives a transaction affecting a customer asset account initiated at a full-function
point-of-sale terminal through the use of an electronic personal identifier and an access
devicebearingaservicemark, logo, ortrademarkassociatedwithanationalcardassociation,

whether or not the access device also bears the service mark, logo, or trademark of an
approved central routing unit, and the national card association’s processing facility cannot
immediately authorize or reject the transaction, such transaction shall be immediately
transmitted to a central routing unit approved pursuant to this chapter, or to a financial
institution, or its data processing center, which is capable of immediately authorizing or
rejecting the transaction.
d. For purposes of this subsection, a national card association must be a membership
corporation or organization, wherever incorporated and maintaining a principal place of
business, whichisengagedinthebusinessofadministeringforthebenefitoftheassociation’s
members a program involving electronic funds transfer transaction cards or access devices
depicting a service mark, logo, or trademark associated with the national card association
and which may be utilized to perform transactions at point-of-sale terminals. A national
card association must have a membership solely comprised of insured depository financial
institutions, organizations directly or indirectly owned or controlled solely by insured
depository financial institutions, entities wholly owned by one or more insured depository
financial institutions, holding companies having at least two-thirds of their assets consisting
of the voting stock of insured depository financial institutions, organizations wholly owned
by one or more holding companies having at least two-thirds of their assets consisting of
the voting stock of insured depository financial institutions and which are solely engaged in
activities related to the programs sponsored by the national card association, or such other
entities or organizations which are authorized by the national card association’s bylaws to
participate in the electronic funds transfer transaction card or access device programs or
other services and programs sponsored by the national card association. For purposes of
this subsection, a national card association shall not include a financial institution, bank
holding company as defined in section 524.1801, or in the federal Bank Holding Company
Act of 1956, 12 U.S.C. §1842(d), as amended to July 1, 1994, or any other financial institution
holding company organized under federal or state law, or a subsidiary or affiliate corporation
owned or controlled by a financial institution or financial institution holding company,
which has authorized a customer or member to engage in satellite terminal transactions. For
purposes of this subsection, a national card association shall also not include a membership
corporation or organization which is conducting business as a regional or nationwide
network of shared electronic funds transfer terminals which do not constitute point-of-sale
terminals, and is engaged in satellite terminal transaction services utilizing a common
service mark, logo, or trademark to identify such terminal services.
e. This subsection does not apply to satellite terminals located in this state, other than
on-line and off-line full-function point-of-sale terminals as identified in this subsection, or
multiple use terminals located in this state which are capable of being operated in a manner
to initiate transactions affecting customer asset accounts through the use of an electronic
personal identifier.
12. Effective July 1, 1994, any transaction engaged in with a retailer through a satellite
terminal at a location in this state off the premises of the financial institution by means
of an access device which results in a debit to a customer asset account shall be cleared
and paid at par during the settlement of such transaction. Notwithstanding the terms of
any contractual agreement between a retailer or financial institution and a national card
association as described in subsection 11, an electronic funds transfer processing facility of
a national card association, a central routing unit approved pursuant to this chapter, or a
data processing center, the processing fees and charges for such transactions to the retailer
shall be as contractually agreed upon between the retailer and the financial institution which
establishes, owns, operates, controls, or processes transactions initiated at the satellite
terminal. All accounting documents reflecting such fees and charges imposed on the
retailer shall separately identify transactions which have resulted in a debit to a customer
asset account and the charges imposed. The provisions of this subsection shall apply to all

satellite terminals, including limited-function terminals, full-function point-of-sale terminals
as identified in subsection 11, paragraph “a”, and multiple use terminals.

Legislative History

[C77, 79, 81, §527.5; 82 Acts, ch 1094, §2]