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.
Summary
This bill would regulate overdraft and non-sufficient funds (NSF) fees charged by banking organizations, banks, trust companies, and credit unions in New York. It requires covered institutions to report annually to the Department of Financial Services on the amount of revenue they earn from overdraft and NSF fees, and on the share of net income those fees represent. The superintendent would then publish the reported data on the department’s website, beginning with a report due in 2026 using 2023 calendar-year data.
The bill also limits when and how these fees may be charged. It would prohibit a bank from imposing an overdraft or NSF fee until ten days after the transaction, giving the customer time to deposit enough funds to cover it. In addition, it bars overdraft fees in certain situations where a later, unrelated transaction causes the account to go negative after the original debit card transaction was already authorized, and it restricts duplicate fees tied to overdraft protection transfers and re-presented transactions. The measure is intended to reduce surprise fees and increase transparency around fee revenue.
Impact
If enacted, the bill would amend multiple provisions of the Banking Law by adding new sections governing fee disclosure and fee practices for banking organizations and related institutions. It would create a new reporting obligation to the superintendent, require public disclosure of overdraft and NSF fee revenue, and impose substantive limits on when overdraft and NSF fees may be assessed. Banks, trust companies, and credit unions subject to state oversight would need to adjust account processing, fee assessment systems, and third-party software to comply with the new restrictions.
Sentiment
The bill’s overall tone is consumer-protection oriented, with the text focused on limiting bank fee practices and increasing transparency. Because there are no committee transcripts or recorded votes provided, there is no documented debate or formal vote history to indicate broader legislative sentiment. Based on the bill’s structure, it appears designed to appeal to consumers and fee reform advocates, while likely drawing concern from banking institutions affected by reduced fee revenue and operational compliance requirements.
Contention
The main points of contention are likely to be the ten-day grace period, the prohibition on certain overdraft fees after unrelated transactions change an account balance, and the limits on multiple NSF or transfer-related fees for the same transaction. Banks and credit unions may argue that these provisions interfere with account management and fee recovery, while consumer advocates would likely support them as protections against repeated or unexpected charges. The reporting requirement may also be debated as an added administrative burden, though it is framed as a transparency measure.
Same As
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.
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.
Provides that charges imposed by certain state chartered banking institutions in connection with a check or other written order drawn on insufficient funds shall not exceed the greater of five dollars or the pro rata share of such state chartered banking institution's total direct costs and charge-off losses for providing non-covered overdraft credit.
Provides that charges imposed by certain state chartered banking institutions in connection with a check or other written order drawn on insufficient funds shall not exceed the greater of five dollars or the pro rata share of such state chartered banking institution's total direct costs and charge-off losses for providing non-covered overdraft credit.
Financial institutions; Financial Privacy Act; permitting disclosure or release of information for investigations of financial exploitation of protected adults. Effective date.