OFFICE OF COMMISSIONER OF BANKING

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of a debtor to its creditor may not approximate the level, in a legal sense, which should govern the relationship of these parties in an electronic payment system. However, describing that level of care as a fiduciary duty will certainly create considerable confusion, at least in the near term. I doubt that the committee could obtain an intelligent description of the duty of a fiduciary to design an electronic system which minimizes unauthorized access and which prevents improper disclosure of information. Assuming that the financial institution's duty absent this section were that of a reasonably prudent person, how much greater is the duty if it is that of a fiduciary? As an alterantive, the committee might consider retaining the specific requirements and prohibitions of this section and allow the financial institution to defend under the bona fide error exemption that appears in Sec. 818(c). The inclusion of a fiduciary duty standard will impose upon the Federal Reserve Board staff the obligation of attempting to determine at each juncture whether a particular course of conduct meets the level of care. Attempting to determine the "purpose" of a statute or to define "legislative intent" is a difficult exercise. That difficulty is multiplied when the legislation includes standards which are vague, or undefined, or which have been hither to inapplicable in particular situations. At the very least the legislation should include a definition of a fiduciary duty if that standard is to be retained.

I certainly appreciate the opportunity to comment on S2065.

In general,

I believe it to be a sound legislative approach which guarantees minimum safeguards without unduly restricting technological innovation in this area. Should you have any specific questions regarding the development of EFT in Wisconsin, do not hesitate to contact me.