Bill Text: NY S05972 | 2023-2024 | General Assembly | Introduced

---

Bill Title: Authorizes the department of financial services to prescribe by regulation the order of payment of checks and other debts, insufficient funds charges and return deposit item charges.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2023-06-01 - SUBSTITUTED BY A5519 [S05972 Detail]

Download: New_York-2023-S05972-Introduced.html

---

                STATE OF NEW YORK
        ________________________________________________________________________

                                          5972

                               2023-2024 Regular Sessions

                    IN SENATE

                                     March 24, 2023
                                       ___________

        Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
          printed to be committed to the Committee on Banks

        AN ACT to amend the banking law, in relation to authorizing the  depart-
          ment  of  financial services to promulgate regulations relating to the
          payment of debit and credit transactions  and  imposition  of  related
          fees by banking organizations

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Section 9-y of the banking law, as added by chapter 398  of
     2  the laws of 2021, is amended to read as follows:
     3    §  9-y.  [Banking institutions to pay checks drawn therein in order of
     4  presentation] Order of payment of checks and other debits,  insufficient
     5  funds  charges  and  return  deposit  item charges.   1. Order of paying
     6  checks. (a) Notwithstanding any law, rule or regulation to the contrary,
     7  every banking [institution] organization that provides checking services
     8  to consumer [checking] accounts shall either pay  checks  in  the  order
     9  wherein  they are received or pay checks from smallest to largest dollar
    10  amount for each business day's transactions.
    11    [2.] (b) If a check is dishonored for insufficient funds and thereaft-
    12  er smaller checks which could be paid are received, the  smaller  checks
    13  shall be honored within amounts on deposit in the subject account.
    14    [3.]  (c)  The  banking  [institution]  organization shall disclose to
    15  consumers in writing the order in which checks are  drawn.  The  written
    16  disclosure  shall be provided to the consumer at the time the account is
    17  opened and prior to any change in such policy.
    18    (d) The superintendent shall promulgate rules and  regulations  neces-
    19  sary for the implementation of this section.
    20    [4.]  2. Regulation of other consumer account transactions and associ-
    21  ated fees. (a) The superintendent shall have the power to  prescribe  by
    22  regulation:

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10261-01-3
        S. 5972                             2

     1    i.  the manner in which banking organizations process debit and credit
     2  transactions, other than those specified  in  subdivision  one  of  this
     3  section, for consumer accounts maintained at such organization;
     4    ii.  the  charges that may be imposed in connection with a check drawn
     5  or other written order upon, or electronic transfer sought to be  effec-
     6  tuated against, insufficient funds or uncollected balances in a consumer
     7  account,  whether or not the banking organization pays such check, writ-
     8  ten order, or electronic transfer;
     9    iii. the charges that may be imposed in connection  with  a  check  or
    10  other  written  order  received by a banking organization for deposit or
    11  collection drawn against a consumer account and subsequently  dishonored
    12  and returned for any reason by the drawee;
    13    iv.  disclosures  provided  to  consumers  regarding the processing of
    14  transactions in a consumer account and the associated fees; and
    15    v. alerts, notices, and other disclosures relating to  the  imposition
    16  or  possible  imposition of a charge as provided in subparagraphs ii and
    17  iii of this paragraph.
    18    (b) In prescribing regulations regarding the manner in  which  banking
    19  organizations  process debit or credit transactions, or the charges that
    20  may be imposed pursuant to subparagraphs ii or iii of paragraph  (a)  of
    21  this  subdivision,  the superintendent shall consider, at a minimum, the
    22  following factors:
    23    i. the cost incurred by the banking  organization,  in  providing  any
    24  services associated with such charges;
    25    ii. the competitive position of the banking organization; and
    26    iii.  the  maintenance  of  a safe and sound banking organization that
    27  protects the public interest.
    28    3. Definition. As used in this section, "consumer [checking] accounts"
    29  means accounts at banking organizations established by  natural  persons
    30  primarily for personal, family or household purposes.
    31    § 2. This act shall take effect immediately.