New York City

State proposes regulations against overdraft fees

January 23, 2025 Brooklyn Eagle Staff
Gov. Kathy Hochul. Photo: Adrian Kraus/AP
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STATEWIDE — GOVERNOR KATHY HOCHUL on Wednesday announced the state Department of Financial Services has proposed rules targeting burdensome overdraft and Non-Sufficient Fund fees, which disproportionately impact lower-income New Yorkers and which the governor called “exploitative and deceptive.”

State-chartered banks would be barred from charging: fees on overdrafts under $20, fees exceeding the overdrawn amount, more than three fees per account per day, fees for instantly declined electronic transactions, multiple fees for the same transaction, daily fees for unpaid overdrafts, double fees to cover overdrafts, or fees for electronic transactions when the consumer’s account indicates sufficient funds at the time the transaction was initiated.

Banks would also be barred from processing electronic debit transactions in a manner intended to maximize the number of overdraft and NSF fees.

Governor Hochul also proposed other consumer protections, including a mandatory 30-day return window for various products, requiring businesses to notify online shoppers when prices are set based on their personal data, simplifying account cancellation processes, new regulations for Buy Now Pay Later providers and energy companies, and allowing banks to pause certain suspicious transactions and report suspected exploitation and fraud against seniors.

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