Requires banks to send account notifications in certain circumstances.
Summary
This bill would require New York banking institutions that offer overdraft protection or similar fee-based services to notify customers whenever the service is used to cover an insufficient-funds transaction. The notice must be sent immediately, by email or another method preferred by the customer, and must state that the overdraft service was triggered and identify any related fees and penalties.
The bill amends the Banking Law by adding parallel notification requirements in two sections, one covering banks under article 3 and another covering institutions under article 9. It takes effect immediately and is aimed at increasing transparency for account holders who may otherwise not realize an overdraft fee or similar charge has been applied.
Impact
The bill would create a new statutory duty for covered banking institutions to provide prompt account notifications when overdraft protection or comparable services are used. It would affect banks and depositors by requiring disclosure of insufficient funds events and associated charges, potentially changing customer communications and compliance practices. The measure would not ban overdraft fees, but it would regulate notice procedures and expand consumer information rights under the Banking Law.
Sentiment
No committee transcript or vote history is available, so there is no recorded debate or roll-call sentiment to assess. Based on the bill’s consumer-protection focus, the measure appears designed to improve transparency for customers rather than impose a broad restriction on banking services. The available context suggests a straightforward informational requirement with no documented opposition or support in the provided materials.
Contention
The main policy issue is whether banks should be required to provide immediate notice each time overdraft protection is used, including disclosure of fees and penalties. Supporters would likely view the bill as a consumer-protection and transparency measure that helps customers avoid surprise charges, while potential concerns from banks could center on operational burden, notification logistics, and the scope of covered services. No specific opposing or supporting stakeholders are identified in the provided record.
Relating to joint accounts in banking institutions and eliminating the requirement that the commissioner approve joint account forms to be used by banking institutions
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.