Three things to know about recent overdraft-focused state bills

Changes to the overdraft landscape are being made in various states and warrant attention. While Washington’s changes get national coverage, these state bills are also important. Here are several recent legislative actions concerning overdraft programs and related banking services.

  • California State Senate Bill 1415: Adds a section to the Financial Code requiring banks and credit unions subject to the examination authority of the Commissioner of Financial Protection and Innovation to report annually the amount of revenue earned from overdraft fees and non-sufficient funds (NSF) fees and the percentage of revenue as a proportion of the net income. The first of these annual reports are due on March 1, 2023, reflecting 2022 revenue. (Approved by governor; law amended.)
  • Connecticut State House Bill 5216: Requires financial institutions make available to Connecticut consumers a low-cost bank account that, among other things, does not include overdraft or NSF fees. The bank account must be available by July 1, 2023, and should provide the core features set forth in the Bank On National Account Standards. New York and other states may serve consumers who live in Connecticut. (Signed by governor; effective January 1, 2023.)


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