Relates to establishing limitations on bank accounts after such accounts have been closed including opening or re-opening such account, requesting a deposit or withdrawal or assessing certain fees.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A6320
SPONSOR: Zebrowski
 
TITLE OF BILL:
An act to amend the banking law, in relation to establishing limitations
on bank accounts after such account has been closed
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill will protect banking customers from surprise fees or the re-o-
pening of an account following the date by which the account was closed.
 
SUMMARY OF PROVISIONS:
Section 1 of the bill adds a new subdivision 2 to Section 9-i of the
banking law as it relates to prohibit banks from doing any of the
following after the date on which a customer is notified that such
customer's account shall be closed:-(1') honoring requests for deposits
or withdrawals, (2) keeping open or re-opening the account, or (3)
charging fees with respect to such account.
Section 2 relates to the effective date.
 
JUSTIFICATION:
For many years consumers have complained about how difficult it can
be-to close a bank account. These frustrations often stem from a bank's
decision to keep open or re-open a customer's account after notification
that.the account shall be closed. There are banks who charge customers
fees for, among other reasons, low account balances and overdraft penal-
ties when third parties request payments from that account. The reopen-
ing of accounts following closure which lead to the accumulation of fees
causes distress and confusion by customers.
This bill provides limitations on reopening of accounts and imposition
of fees on closed accounts. Customers should not be subject to surprise
fees after their account has been closed.
 
PRIOR LEGISLATIVE HISTORY:
A.240 of 2021-22
A.9597 of 2019-20
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
6320
2023-2024 Regular Sessions
IN ASSEMBLY
April 4, 2023
___________
Introduced by M. of A. ZEBROWSKI -- read once and referred to the
Committee on Banks
AN ACT to amend the banking law, in relation to establishing limitations
on bank accounts after such account has been closed
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 9-i of the banking law, as added by chapter 646 of
2 the laws of 1985, is amended to read as follows:
3 § 9-i. Close-out fees prohibited in certain cases; post-closing limi-
4 tations. 1. No banking institution, as that term is defined in section
5 nine-f of this [chapter] article, shall charge its customers a fee for
6 the withdrawal of all funds from any account resulting in the closing of
7 such account provided that such account was opened for a period of at
8 least one hundred eighty consecutive days prior to its closing.
9 2. No banking institution, as that term is defined in section nine-f
10 of this article, after the date on which the customer is informed that
11 an account shall be closed shall:
12 (a) honor any request for a deposit or withdrawal with respect to such
13 account;
14 (b) keep open or re-open such account; or
15 (c) charge any customer or former customer any fee with respect to any
16 such account, provided that the foregoing shall not prevent the banking
17 institution from recovering from such customer any amounts necessary to
18 satisfy a negative balance that existed at the time the account was
19 closed.
20 § 2. This act shall take effect one year after it shall have become a
21 law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00941-01-3