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A09210 Summary:

BILL NOA09210
 
SAME ASNo Same As
 
SPONSORJacobson
 
COSPNSRLucas, Hyndman, Taylor, Santabarbara, Glick, Dilan, Weprin, Sayegh, Septimo, Davila
 
MLTSPNSR
 
Add §9-ii, Bank L
 
Establishes standards for the closure of bank accounts in the state of New York to include providing notice of closure, honoring checks, and the return of funds to account owners.
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A09210 Actions:

BILL NOA09210
 
02/16/2024referred to banks
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A09210 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A9210
 
SPONSOR: Jacobson
  TITLE OF BILL: An act to amend the banking law, in relation to establishing criteria for the closure of banking accounts in the state of New York   PURPOSE OR GENERAL IDEA OF BILL: To give bank account customers notification on why their personal or business bank account is closed by a bank and to ensure their checks are honored and funds are returned.   SUMMARY OF PROVISIONS: Section 1 amends the Banking Law by adding a new section 9-11, which states that all banking organizations and out-of-state banks authorized to operate and maintain branches pursuant to article 5-c of this chapter when closing the account of a customer shall: (a) Provide 60 days' notice that such account is being closed, whether for personal or business use, and provide the reason for such closure; (b) Continue to honor checks submitted or processed within 30 days after the closure of such account; and (c) Return any remaining funds from such account within 60 days after the closure to such account to the owner. Section 2 sets forth the effective date which is immediately.   JUSTIFICATION: Last year, 1.5 million bank customers had their checking or savings accounts closed without prior notice and for no apparent reason. Under the guise of "suspicious activity," banks are closing accounts more out of fear of upsetting regulators than actual proof of laundering and other illegal activities. These unexpected account closings can wreak havoc with one's credit rating, cause checks to bounce and create other problems that did not exist before. Due to these unexpected bank account closings, individuals and busi- nesses have had their reputations, which took years to build in their local community, severely damaged. Unexpected bank account closings causes businesses to bounce checks to employees and suppliers, which in turn causes the recipients of these checks to bounce their own checks. By giving adequate notice, account owners will have sufficient time to make arrangements with another bank, avoiding disruptions to their financial well-being and to those they deal with. This bill will help address problems from unexpected bank account clos- ings.   PRIOR LEGISLATIVE HISTORY: None. New bill.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.   EFFECTIVE DATE: This act shall take effect immediately.
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A09210 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          9210
 
                   IN ASSEMBLY
 
                                    February 16, 2024
                                       ___________
 
        Introduced by M. of A. JACOBSON -- read once and referred to the Commit-
          tee on Banks
 
        AN  ACT  to  amend the banking law, in relation to establishing criteria
          for the closure of banking accounts in the state of New York
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1. The banking law is amended by adding a new section 9-ii to
     2  read as follows:
     3    § 9-ii. Closure of accounts. All  banking  organizations  and  out-of-
     4  state  banks  authorized  to  operate  and maintain branches pursuant to
     5  article five-C of this chapter when closing the account  of  a  customer
     6  shall:
     7    (a)  provide  sixty  days'  notice  that such account is being closed,
     8  whether for personal or business use, and provide the  reason  for  such
     9  closure;
    10    (b) continue to honor checks submitted or processed within thirty days
    11  after the closure of such account; and
    12    (c)  return  any  remaining  funds from such account within sixty days
    13  after the closure of such account to the owner.
    14    § 2. This act shall take effect immediately.
 
 
 
 
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14062-01-4
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