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A08266 Summary:

BILL NOA08266
 
SAME ASSAME AS S07742
 
SPONSORZaccaro
 
COSPNSR
 
MLTSPNSR
 
Add 37-b, 135 & 6-q, amd 456, Bank L
 
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.
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A08266 Actions:

BILL NOA08266
 
11/15/2023referred to banks
01/03/2024referred to banks
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A08266 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8266
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    November 15, 2023
                                       ___________
 
        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-four,
    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
    25  from the date of the subject transaction during which  time  period  the
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13438-02-3

        A. 8266                             2
 
     1  member  may  deposit  funds  in an amount sufficient to cover the trans-
     2  action.
     3    2. For the purposes of this section:
     4    (a)  "Non-sufficient  funds fees" means fees resulting from the initi-
     5  ation of a transaction that exceeds the customer's  account  balance  if
     6  the customer's bank or trust company declines to make the payment.
     7    (b)  "Overdraft  fees"  means  fees resulting from the processing of a
     8  debit transaction that exceeds a customer's account balance.
     9    § 3. Section 456 of the banking law is amended by adding a new  subdi-
    10  vision 10 to read as follows:
    11    10. (a) Impose an overdraft fee or non-sufficient funds fee prior to a
    12  period of ten days from the date of the subject transaction during which
    13  time  period  the  member  may  deposit funds in an amount sufficient to
    14  cover the transaction.
    15    (b) For the purposes of this subdivision:
    16    (i) "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 bank or credit union declines to make the payment.
    19    (ii) "Overdraft fees" means fees resulting from the  processing  of  a
    20  debit transaction that exceeds a customer's account balance.
    21    § 4. The banking law is amended by adding a new section 6-q to read as
    22  follows:
    23    §  6-q. Improper practices relating to the imposition of certain fees.
    24  1. No banking organization shall charge overdraft  fees  on  debit  card
    25  transactions  that do not exceed the account's positive balance in cases
    26  where a subsequent, unrelated transaction lowers the  consumer's  avail-
    27  able  balance  to  below  the  amount  of  the  original charge when the
    28  original transaction is presented for settlement.
    29    2. A fee for an overdraft protection transfer, where such  service  is
    30  available  and enrolled in by the consumer, may only be charged when the
    31  transfer amount is sufficient to cover an overdraft transaction. If  the
    32  amount  transferred  from  another account of the consumer is not suffi-
    33  cient to prevent an overdraft, then the banking  organization  may  only
    34  charge  a  single fee for the overdraft transaction and may not charge a
    35  second fee for a transfer of funds which is insufficient to prevent  the
    36  overdraft.
    37    3.  Institutions  shall  not charge more than one non-sufficient funds
    38  fee per transaction, regardless of how many times  that  transaction  is
    39  re-presented  for  payment  by  a  merchant. Banking organizations shall
    40  update associated software, or require  the  software  update  of  their
    41  third-party  service  providers,  in order to prevent multiple fees from
    42  being charged for a single transaction in violation of this subdivision.
    43    § 5. This act shall take effect on the sixtieth  day  after  it  shall
    44  have become a law.
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