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A01721 Summary:

BILL NOA01721
 
SAME ASSAME AS S04207
 
SPONSORWeprin
 
COSPNSR
 
MLTSPNSR
 
Add §§135 & 458, Bank L
 
Requires banks to send account notifications in certain circumstances.
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A01721 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A1721
 
SPONSOR: Weprin
  TITLE OF BILL: An act to amend the banking law, in relation to requiring banks to noti- fy customers of account overdrafts in certain circumstances   PURPOSE OR GENERAL IDEA OF BILL: This bill will require banks, to notify their customers with accounts featuring overdraft protection when such protection is exercised. This notification will also list any fees and penalties associated with t this service. This will enable the customer to take action as soon as possible to avoid fees, penalties, and interest on an overdrawn account,   SUMMARY OF SPECIFIC PROVISIONS: Section 1: The banking law is amended by adding a new section 135. Paragraph one states that banks which offer overdraft protection or similar service that the banks must notify customers when their overdraft protection has been employed. Paragraph two establishes that this contact shall be made via email or the customers preferred method of notification, and shall include a list of penalties or fees associated with this service. Section 2: The banking law is amended by adding a new section 458: This section is identical to section one. Section 3: This act shall take effect immediately   JUSTIFICATION: This bill will simply ensure that banking customers are alerted when their accounts are overdrawn if they have signed up for overdraft protection or a similar service. This would allow them to act to fix the situation. Simply put, while it is a customers responsibility to monitor their.account, if for some reason the account does become overdrawn for some reason, the bank may charge days of fees and penalties before the customer happens to check their balance, and even then, they would not readily know what the amount of the fees and penalties being levied will amount to. By requiring customers be notified when their overdraft protection has been activated, it creates a situation where customers are better able to manage their finances.   PRIOR LEGISLATIVE HISTORY: 02/08/17 referred to banks 01/03/18 referred to banks   FISCAL IMPLICATIONS: None   EFFECTIVE DATE: Immediately
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A01721 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          1721
 
                               2025-2026 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 14, 2025
                                       ___________
 
        Introduced by M. of A. WEPRIN -- read once and referred to the Committee
          on Banks
 
        AN ACT to amend the banking law, in relation to requiring banks to noti-
          fy customers of account overdrafts in certain circumstances
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. The banking law is amended by adding a new section  135  to
     2  read as follows:
     3    §  135.  Account  notifications.  1. Where a banking institution under
     4  this article offers its customers or depositors overdraft protection, or
     5  any other similar service wherein the banking institution charges a  fee
     6  to  prevent  account  penalties for insufficient funds, such institution
     7  shall notify  such  customer  or  depositor  whenever  such  service  is
     8  employed to prevent account penalties.
     9    2. A banking institution shall immediately notify a customer or depos-
    10  itor  of  the  insufficiency  of  funds  in such individual's account or
    11  accounts via electronic mail, or if the individual prefers, through  any
    12  other  method  of  notification.  Such notification shall state that the
    13  bank's overdraft service has gone into effect and shall  list  any  fees
    14  and penalties associated with such service.
    15    § 2. The banking law is amended by adding a new section 458 to read as
    16  follows:
    17    §  458.  Account  notifications.  1. Where a banking institution under
    18  this article offers its customers or depositors overdraft protection, or
    19  any other similar service wherein the banking institution charges a  fee
    20  to  prevent  account  penalties for insufficient funds, such institution
    21  shall notify  such  customer  or  depositor  whenever  such  service  is
    22  employed to prevent account penalties.
    23    2. A banking institution shall immediately notify a customer or depos-
    24  itor  of  the  insufficiency  of  funds  in such individual's account or
    25  accounts via electronic mail, or if the individual prefers, through  any
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03585-01-5

        A. 1721                             2
 
     1  other  method  of  notification.  Such notification shall state that the
     2  bank's overdraft service has gone into effect and shall  list  any  fees
     3  and penalties associated with such service.
     4    § 3. This act shall take effect immediately.
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