S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5519
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 16, 2023
                                ___________
 
 Introduced by M. of A. HUNTER -- read once and referred to the Committee
   on Banks
 
 AN  ACT to amend the banking law, in relation to authorizing the depart-
   ment of financial services to promulgate regulations relating  to  the
   payment  of  debit  and  credit transactions and imposition of related
   fees by banking organizations

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Section 9-y of the banking law, as added by chapter 398 of
 the laws of 2021, is amended to read as follows:
   § 9-y. [Banking institutions to pay checks drawn therein in  order  of
 presentation]  ORDER OF PAYMENT OF CHECKS AND OTHER DEBITS, INSUFFICIENT
 FUNDS CHARGES AND RETURN DEPOSIT ITEM  CHARGES.    1.  ORDER  OF  PAYING
 CHECKS. (A) Notwithstanding any law, rule or regulation to the contrary,
 every banking [institution] ORGANIZATION that provides CHECKING SERVICES
 TO  consumer  [checking]  accounts  shall either pay checks in the order
 wherein they are received or pay checks from smallest to largest  dollar
 amount for each business day's transactions.
   [2.] (B) If a check is dishonored for insufficient funds and thereaft-
 er  smaller  checks which could be paid are received, the smaller checks
 shall be honored within amounts on deposit in the subject account.
   [3.] (C) The banking  [institution]  ORGANIZATION  shall  disclose  to
 consumers  in  writing  the order in which checks are drawn. The written
 disclosure shall be provided to the consumer at the time the account  is
 opened and prior to any change in such policy.
   (D)  The  superintendent shall promulgate rules and regulations neces-
 sary for the implementation of this section.
   [4.] 2. REGULATION OF OTHER CONSUMER ACCOUNT TRANSACTIONS AND  ASSOCI-
 ATED  FEES.  (A) THE SUPERINTENDENT SHALL HAVE THE POWER TO PRESCRIBE BY
 REGULATION:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10261-01-3
 A. 5519                             2
              

 
   I. THE MANNER IN WHICH BANKING ORGANIZATIONS PROCESS DEBIT AND  CREDIT
 TRANSACTIONS,  OTHER  THAN  THOSE  SPECIFIED  IN SUBDIVISION ONE OF THIS
 SECTION, FOR CONSUMER ACCOUNTS MAINTAINED AT SUCH ORGANIZATION;
   II.  THE  CHARGES THAT MAY BE IMPOSED IN CONNECTION WITH A CHECK DRAWN
 OR OTHER WRITTEN ORDER UPON, OR ELECTRONIC TRANSFER SOUGHT TO BE  EFFEC-
 TUATED AGAINST, INSUFFICIENT FUNDS OR UNCOLLECTED BALANCES IN A CONSUMER
 ACCOUNT,  WHETHER OR NOT THE BANKING ORGANIZATION PAYS SUCH CHECK, WRIT-
 TEN ORDER, OR ELECTRONIC TRANSFER;
   III. THE CHARGES THAT MAY BE IMPOSED IN CONNECTION  WITH  A  CHECK  OR
 OTHER  WRITTEN  ORDER  RECEIVED BY A BANKING ORGANIZATION FOR DEPOSIT OR
 COLLECTION DRAWN AGAINST A CONSUMER ACCOUNT AND SUBSEQUENTLY  DISHONORED
 AND RETURNED FOR ANY REASON BY THE DRAWEE;
   IV.  DISCLOSURES  PROVIDED  TO  CONSUMERS  REGARDING THE PROCESSING OF
 TRANSACTIONS IN A CONSUMER ACCOUNT AND THE ASSOCIATED FEES; AND
   V. ALERTS, NOTICES, AND OTHER DISCLOSURES RELATING TO  THE  IMPOSITION
 OR  POSSIBLE  IMPOSITION OF A CHARGE AS PROVIDED IN SUBPARAGRAPHS II AND
 III OF THIS PARAGRAPH.
   (B) IN PRESCRIBING REGULATIONS REGARDING THE MANNER IN  WHICH  BANKING
 ORGANIZATIONS  PROCESS DEBIT OR CREDIT TRANSACTIONS, OR THE CHARGES THAT
 MAY BE IMPOSED PURSUANT TO SUBPARAGRAPHS II OR III OF PARAGRAPH  (A)  OF
 THIS  SUBDIVISION,  THE SUPERINTENDENT SHALL CONSIDER, AT A MINIMUM, THE
 FOLLOWING FACTORS:
   I. THE COST INCURRED BY THE BANKING  ORGANIZATION,  IN  PROVIDING  ANY
 SERVICES ASSOCIATED WITH SUCH CHARGES;
   II. THE COMPETITIVE POSITION OF THE BANKING ORGANIZATION; AND
   III.  THE  MAINTENANCE  OF  A SAFE AND SOUND BANKING ORGANIZATION THAT
 PROTECTS THE PUBLIC INTEREST.
   3. DEFINITION. As used in this section, "consumer [checking] accounts"
 means accounts AT BANKING ORGANIZATIONS established by  natural  persons
 primarily for personal, family or household purposes.
   § 2. This act shall take effect immediately.