Requires banks to report to the superintendent annually on the amount of revenue earned from overdraft fees; prohibits banks from imposing overdraft fees during a ten day grace period; regulates the imposition of overdraft and NSF fees.
STATE OF NEW YORK
________________________________________________________________________
117
2025-2026 Regular Sessions
IN ASSEMBLY(Prefiled)
January 8, 2025
___________
Introduced by M. of A. ZACCARO -- read once and referred to the Commit-
tee on Banks
AN ACT to amend the banking law, in relation to overdraft fees charged
by banking organizations
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 37-b to
2 read as follows:
3 § 37-b. Report on overdraft fees. 1. Every banking organization
4 subject to the examination authority of the superintendent shall report
5 annually, on or before March first, to the superintendent on the amount
6 of revenue earned from overdraft fees and non-sufficient funds fees
7 collected in the most recently completed calendar year and the percent-
8 age of that revenue as a proportion of the net income of the banking
9 organization. The superintendent shall publish a report containing such
10 data for each organization on the department's internet website.
11 2. The superintendent shall publish the first report required by this
12 section on or before August thirty-first, two thousand twenty-six,
13 covering data from the two thousand twenty-three calendar year, and
14 annually thereafter by March thirty-first of each year.
15 3. As used in this section:
16 (a) "Non-sufficient funds fees" means fees resulting from the initi-
17 ation of a transaction that exceeds the customer's account balance if
18 the customer's banking organization declines to make the payment.
19 (b) "Overdraft fees" means fees resulting from the processing of a
20 debit transaction that exceeds a customer's account balance.
21 § 2. The banking law is amended by adding a new section 135 to read as
22 follows:
23 § 135. Overdraft fees. 1. No banking organization shall impose an
24 overdraft fee or non-sufficient funds fee prior to a period of ten days
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00517-01-5
A. 117 2
1 from the date of the subject transaction during which time period the
2 member may deposit funds in an amount sufficient to cover the trans-
3 action.
4 2. For the purposes of this section:
5 (a) "Non-sufficient funds fees" means fees resulting from the initi-
6 ation of a transaction that exceeds the customer's account balance if
7 the customer's bank or trust company declines to make the payment.
8 (b) "Overdraft fees" means fees resulting from the processing of a
9 debit transaction that exceeds a customer's account balance.
10 § 3. Section 456 of the banking law is amended by adding a new subdi-
11 vision 10 to read as follows:
12 10. (a) Impose an overdraft fee or non-sufficient funds fee prior to a
13 period of ten days from the date of the subject transaction during which
14 time period the member may deposit funds in an amount sufficient to
15 cover the transaction.
16 (b) For the purposes of this subdivision:
17 (i) "Non-sufficient funds fees" means fees resulting from the initi-
18 ation of a transaction that exceeds the customer's account balance if
19 the customer's bank or credit union declines to make the payment.
20 (ii) "Overdraft fees" means fees resulting from the processing of a
21 debit transaction that exceeds a customer's account balance.
22 § 4. The banking law is amended by adding a new section 6-q to read as
23 follows:
24 § 6-q. Improper practices relating to the imposition of certain fees.
25 1. No banking organization shall charge overdraft fees on debit card
26 transactions that do not exceed the account's positive balance in cases
27 where a subsequent, unrelated transaction lowers the consumer's avail-
28 able balance to below the amount of the original charge when the
29 original transaction is presented for settlement.
30 2. A fee for an overdraft protection transfer, where such service is
31 available and enrolled in by the consumer, may only be charged when the
32 transfer amount is sufficient to cover an overdraft transaction. If the
33 amount transferred from another account of the consumer is not suffi-
34 cient to prevent an overdraft, then the banking organization may only
35 charge a single fee for the overdraft transaction and may not charge a
36 second fee for a transfer of funds which is insufficient to prevent the
37 overdraft.
38 3. Institutions shall not charge more than one non-sufficient funds
39 fee per transaction, regardless of how many times that transaction is
40 re-presented for payment by a merchant. Banking organizations shall
41 update associated software, or require the software update of their
42 third-party service providers, in order to prevent multiple fees from
43 being charged for a single transaction in violation of this subdivision.
44 § 5. This act shall take effect on the sixtieth day after it shall
45 have become a law.
