S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5972
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              March 24, 2023
                                ___________
 
 Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
   printed to be committed 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
 S. 5972                             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.