S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8266
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             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:

   Section 1. The banking law is amended by adding a new section 37-b  to
 read as follows:
   §  37-B.  REPORT  ON  OVERDRAFT  FEES.  1.  EVERY BANKING ORGANIZATION
 SUBJECT TO THE EXAMINATION AUTHORITY OF THE SUPERINTENDENT SHALL  REPORT
 ANNUALLY,  ON OR BEFORE MARCH FIRST, TO THE SUPERINTENDENT ON THE AMOUNT
 OF REVENUE EARNED FROM OVERDRAFT  FEES  AND  NON-SUFFICIENT  FUNDS  FEES
 COLLECTED  IN THE MOST RECENTLY COMPLETED CALENDAR YEAR AND THE PERCENT-
 AGE OF THAT REVENUE AS A PROPORTION OF THE NET  INCOME  OF  THE  BANKING
 ORGANIZATION.  THE SUPERINTENDENT SHALL PUBLISH A REPORT CONTAINING SUCH
 DATA FOR EACH ORGANIZATION ON THE DEPARTMENT'S INTERNET WEBSITE.
   2. THE SUPERINTENDENT SHALL PUBLISH THE FIRST REPORT REQUIRED BY  THIS
 SECTION  ON  OR  BEFORE  AUGUST  THIRTY-FIRST, TWO THOUSAND TWENTY-FOUR,
 COVERING DATA FROM THE TWO  THOUSAND  TWENTY-THREE  CALENDAR  YEAR,  AND
 ANNUALLY THEREAFTER BY MARCH THIRTY-FIRST OF EACH YEAR.
   3. AS USED IN THIS SECTION:
   (A)  "NON-SUFFICIENT  FUNDS FEES" MEANS FEES RESULTING FROM THE INITI-
 ATION OF A TRANSACTION THAT EXCEEDS THE CUSTOMER'S  ACCOUNT  BALANCE  IF
 THE CUSTOMER'S BANKING ORGANIZATION DECLINES TO MAKE THE PAYMENT.
   (B)  "OVERDRAFT  FEES"  MEANS  FEES RESULTING FROM THE PROCESSING OF A
 DEBIT TRANSACTION THAT EXCEEDS A CUSTOMER'S ACCOUNT BALANCE.
   § 2. The banking law is amended by adding a new section 135 to read as
 follows:
   § 135. OVERDRAFT FEES. 1. NO  BANKING  ORGANIZATION  SHALL  IMPOSE  AN
 OVERDRAFT  FEE OR NON-SUFFICIENT FUNDS FEE PRIOR TO A PERIOD OF TEN DAYS
 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
 
 MEMBER  MAY  DEPOSIT  FUNDS  IN AN AMOUNT SUFFICIENT TO COVER THE TRANS-
 ACTION.
   2. FOR THE PURPOSES OF THIS SECTION:
   (A)  "NON-SUFFICIENT  FUNDS FEES" MEANS FEES RESULTING FROM THE INITI-
 ATION OF A TRANSACTION THAT EXCEEDS THE CUSTOMER'S  ACCOUNT  BALANCE  IF
 THE CUSTOMER'S BANK OR TRUST COMPANY DECLINES TO MAKE THE PAYMENT.
   (B)  "OVERDRAFT  FEES"  MEANS  FEES RESULTING FROM THE PROCESSING OF A
 DEBIT TRANSACTION THAT EXCEEDS A CUSTOMER'S ACCOUNT BALANCE.
   § 3. Section 456 of the banking law is amended by adding a new  subdi-
 vision 10 to read as follows:
   10. (A) IMPOSE AN OVERDRAFT FEE OR NON-SUFFICIENT FUNDS FEE PRIOR TO A
 PERIOD OF TEN DAYS FROM THE DATE OF THE SUBJECT TRANSACTION DURING WHICH
 TIME  PERIOD  THE  MEMBER  MAY  DEPOSIT FUNDS IN AN AMOUNT SUFFICIENT TO
 COVER THE TRANSACTION.
   (B) FOR THE PURPOSES OF THIS SUBDIVISION:
   (I) "NON-SUFFICIENT FUNDS FEES" MEANS FEES RESULTING FROM  THE  INITI-
 ATION  OF  A  TRANSACTION THAT EXCEEDS THE CUSTOMER'S ACCOUNT BALANCE IF
 THE CUSTOMER'S BANK OR CREDIT UNION DECLINES TO MAKE THE PAYMENT.
   (II) "OVERDRAFT FEES" MEANS FEES RESULTING FROM THE  PROCESSING  OF  A
 DEBIT TRANSACTION THAT EXCEEDS A CUSTOMER'S ACCOUNT BALANCE.
   § 4. The banking law is amended by adding a new section 6-q to read as
 follows:
   §  6-Q. IMPROPER PRACTICES RELATING TO THE IMPOSITION OF CERTAIN FEES.
 1. NO BANKING ORGANIZATION SHALL CHARGE OVERDRAFT  FEES  ON  DEBIT  CARD
 TRANSACTIONS  THAT DO NOT EXCEED THE ACCOUNT'S POSITIVE BALANCE IN CASES
 WHERE A SUBSEQUENT, UNRELATED TRANSACTION LOWERS THE  CONSUMER'S  AVAIL-
 ABLE  BALANCE  TO  BELOW  THE  AMOUNT  OF  THE  ORIGINAL CHARGE WHEN THE
 ORIGINAL TRANSACTION IS PRESENTED FOR SETTLEMENT.
   2. A FEE FOR AN OVERDRAFT PROTECTION TRANSFER, WHERE SUCH  SERVICE  IS
 AVAILABLE  AND ENROLLED IN BY THE CONSUMER, MAY ONLY BE CHARGED WHEN THE
 TRANSFER AMOUNT IS SUFFICIENT TO COVER AN OVERDRAFT TRANSACTION. IF  THE
 AMOUNT  TRANSFERRED  FROM  ANOTHER ACCOUNT OF THE CONSUMER IS NOT SUFFI-
 CIENT TO PREVENT AN OVERDRAFT, THEN THE BANKING  ORGANIZATION  MAY  ONLY
 CHARGE  A  SINGLE FEE FOR THE OVERDRAFT TRANSACTION AND MAY NOT CHARGE A
 SECOND FEE FOR A TRANSFER OF FUNDS WHICH IS INSUFFICIENT TO PREVENT  THE
 OVERDRAFT.
   3.  INSTITUTIONS  SHALL  NOT CHARGE MORE THAN ONE NON-SUFFICIENT FUNDS
 FEE PER TRANSACTION, REGARDLESS OF HOW MANY TIMES  THAT  TRANSACTION  IS
 RE-PRESENTED  FOR  PAYMENT  BY  A  MERCHANT. BANKING ORGANIZATIONS SHALL
 UPDATE ASSOCIATED SOFTWARE, OR REQUIRE  THE  SOFTWARE  UPDATE  OF  THEIR
 THIRD-PARTY  SERVICE  PROVIDERS,  IN ORDER TO PREVENT MULTIPLE FEES FROM
 BEING CHARGED FOR A SINGLE TRANSACTION IN VIOLATION OF THIS SUBDIVISION.
   § 5. This act shall take effect on the sixtieth  day  after  it  shall
 have become a law.