Bill Text: NJ S1109 | 2012-2013 | Regular Session | Introduced
Bill Title: Requires certain financial institutions to disclose overdraft fees.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-01-23 - Introduced in the Senate, Referred to Senate Commerce Committee [S1109 Detail]
Download: New_Jersey-2012-S1109-Introduced.html
Sponsored by:
Senator NIA H. GILL
District 34 (Essex and Passaic)
SYNOPSIS
Requires certain financial institutions to disclose overdraft fees.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning overdraft fees charged by certain financial institutions and supplementing Title 17 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"Account" means a checking account, savings account or other deposit account.
"Financial institution" means a State chartered bank, savings bank, savings and loan association or credit union, which accepts deposits of funds.
"Periodic account statement" means any written statement provided on a regular basis at the end of a periodic cycle by a financial institution to an account holder summarizing all debits and credits to an account held by the account holder during a periodic cycle.
2. If a financial institution provides a periodic account statement, the financial institution shall disclose on the statement:
a. As to every overdraft fee, an indication as to whether each overdraft was created by check, debit card, automated teller machine withdrawal or other means;
b. The amount of each overdraft fee, expressed as a dollar amount and as an annual percentage rate, representing the amount of the overdraft fee in relation to the amount of the overdraft; and
c. The total dollar amount for all overdraft fees, for the statement period and calendar year to date.
3. A financial institution which violates this act shall be subject to a fine of not more than $500 for each violation. The fine shall be collected by the Commissioner of Banking and Insurance in a summary manner pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).
4. The Commissioner of Banking and Insurance shall adopt rules to implement the provisions of this act pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), including rules establishing requirements for financial institutions to provide adequate disclosure of overdraft fees to prospective and existing account holders, through advertising, fee schedules and other appropriate means.
5. This act shall take effect on the 90th day following enactment.
STATEMENT
The bill provides that if a State-chartered financial institution provides a periodic account statement, the financial institution must disclose on the statement, as to every overdraft fee, an indication as to whether the overdraft was created by check, debit card, automated teller machine withdrawal or other means. The bill also provides that the financial institution must disclose the dollar amount of each fee, and express the fee as an annual percentage rate, representing the amount of the overdraft fee in relation to the amount of the overdraft. In addition, the financial institution must disclose the total dollar amount for all overdraft fees, for the statement period and calendar year to date. The bill also provides fines for each violation, to be collected by the Commissioner of Banking and Insurance in a summary manner pursuant to the "Penalty Enforcement Law of 1999."
Finally, the bill requires the Commissioner of Banking and Insurance to adopt rules to implement the bill's provisions, including rules establishing requirements for financial institutions to provide adequate disclosure of overdraft fees to prospective and existing account holders, through advertising, fee schedules and other appropriate means.
