II 

117TH CONGRESS 

1ST SESSION S. 2677 

To amend the Truth in Lending Act to limit overdraft fees and establish 

fair and transparent practices related to the marketing and provision 

of overdraft coverage programs at depository institutions, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 9, 2021 

Mr. BOOKER (for himself and Ms. WARREN) introduced the following bill; 

which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To amend the Truth in Lending Act to limit overdraft fees 

and establish fair and transparent practices related to 

the marketing and provision of overdraft coverage programs at depository institutions, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stop Overdraft Profit5 eering Act of 2021’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—Congress finds the following: 


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1 (1) Overdraft coverage is a form of short-term 

2 credit that depository institutions market for con3 sumer transaction accounts. Historically, depository 

4 institutions covered overdrafts for a fee on an ad hoc 

5 basis. 

6 (2) With the growth in specially designed soft7 ware programs and in consumer use of debit cards, 

8 overdraft coverage for a fee has become more preva9 lent. 

10 (3) Many depository institutions market a 

11 range of overdraft options but aggressively encour12 age consumers to consent to the most expensive op13 tion, where a high flat fee is collected for every indi14 vidual overdraft transaction. 

15 (4) Many depository institutions collect a high 

16 flat fee, including for small dollar transactions, each 

17 time the institution covers an overdraft, impose mul18 tiple overdraft coverage fees within a single day, and 

19 charge additional fees for each day during which the 

20 account remains overdrawn. 

21 (5) Such abusive practices in connection with 

22 overdraft coverage fees have deprived consumers of 

23 meaningful options and placed significant financial 

24 burdens on low- and moderate-income consumers. 


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1 (b) PURPOSE.—It is the purpose of this Act to pro2 tect consumers by limiting abusive overdraft coverage fees 

3 and practices and by providing meaningful disclosures and 

4 consumer choice in connection with overdraft coverage 

5 fees. 

6 SEC. 3. DEFINITIONS. 

7 In this Act: 

8 (1) CFPB.—The term ‘‘CFPB’’ means the Bu9 reau of Consumer Financial Protection. 

10 (2) DEPOSITORY INSTITUTION; OVERDRAFT; 

11 OVERDRAFT COVERAGE FEE; TRANSACTION AC12 COUNT; NONSUFFICIENT FUND FEE.—The terms 

13 ‘‘depository institution’’, ‘‘overdraft’’, ‘‘overdraft cov14 erage fee’’, ‘‘transaction account’’, and ‘‘nonsuffi15 cient fund fee’’ have the meanings given the terms 

16 in 140B(p) of the Truth in Lending Act, as added 

17 by section 4 of this Act. 

18 SEC. 4. FAIR MARKETING AND PROVISION OF OVERDRAFT 

19 COVERAGE PROGRAMS. 

20 (a) IN GENERAL.—Chapter 2 of the Truth in Lend21 ing Act (15 U.S.C. 1631 et seq.) is amended by adding 

22 at the end the following: 


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1 ‘‘§ 140B. Overdraft coverage program disclosures and 

2 consumer protection 

3 ‘‘(a) PROHIBITIONS.—No depository institution may 

4 engage in acts or practices in connection with the mar5 keting of or the provision of overdraft coverage that are 

6 designed to evade the provisions of this section. 

7 ‘‘(b) MARKETING DISCLOSURES.—Each depository 

8 institution that provides or offers to provide overdraft cov9 erage with respect to transaction accounts held at that de10 pository institution shall clearly and conspicuously disclose 

11 in all marketing materials for such overdraft coverage any 

12 overdraft coverage fees with respect to such overdraft cov13 erage. 

14 ‘‘(c) OVERDRAFT COVERAGE FEES.— 

15 ‘‘(1) IN GENERAL.—Except as provided in para16 graph (2), no depository institution may charge an 

17 overdraft coverage fee for any transaction— 

18 ‘‘(A) at an automated teller machine; or 

19 ‘‘(B) involving a one-time debit card trans20 action. 

21 ‘‘(2) OVERDRAFT FEES PERMITTED FOR

22 CHECKS AND AUTOMATIC RECURRING PAYMENTS.— 

23 A depository institution may charge an overdraft 

24 coverage fee for a check or an automatic recurring 

25 payment as part of an overdraft coverage program 


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1 that incorporates the requirements identified in sub2 sections (d) through (l). 

3 ‘‘(d) CONSUMER CONSENT OPT-IN.—A depository in4 stitution may charge overdraft coverage fees with respect 

5 to the use of checks or automatic recurring payments only 

6 if— 

7 ‘‘(1) the depository institution has waited at 

8 least 3 days after opening an account to offer the 

9 overdraft coverage program; and 

10 ‘‘(2) the consumer has consented in writing, in 

11 electronic form, or in such other form as is per12 mitted under regulations of the Bureau. 

13 ‘‘(e) CONSUMER DISCLOSURES.—Each depository in14 stitution shall clearly disclose to each consumer covered 

15 by an overdraft protection program of that depository in16 stitution— 

17 ‘‘(1) that the consumer may be charged for not 

18 more than 1 overdraft coverage fee in any single cal19 endar month and not more than 6 overdraft cov20 erage fees in any single calendar year, per trans21 action account; 

22 ‘‘(2) information about any alternative over23 draft products that are available (such as linked ac24 counts, lines of credit, and alerts), including a clear 


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1 explanation of how the terms and fees for such alter2 native services and products differ; and 

3 ‘‘(3) such other information as the Bureau may 

4 require, by rule. 

5 ‘‘(f) PERIODIC STATEMENTS.—Each depository insti6 tution that offers an overdraft coverage program shall, in 

7 each periodic statement for any transaction account that 

8 has an overdraft coverage program feature, clearly disclose 

9 to the consumer the dollar amount of all overdraft cov10 erage fees and nonsufficient fund fees charged to the con11 sumer for the relevant period and year to date. 

12 ‘‘(g) EXCLUSION FROM ACCOUNT BALANCE INFOR13 MATION.—No depository institution may include the 

14 amount available under the overdraft coverage program of 

15 a consumer as part of the transaction account balance of 

16 that consumer and the transaction account balance shall 

17 be more prominently displayed than any amount available 

18 under the overdraft coverage program. 

19 ‘‘(h) PROMPT NOTIFICATION.—Each depository insti20 tution shall promptly notify consumers, through a reason21 able means selected by the consumer, when overdraft cov22 erage has been accessed with respect to the account of 

23 the consumer, not later than on the day on which such 

24 access occurs, including— 

25 ‘‘(1) the date of the transaction; 


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1 ‘‘(2) the type of transaction; 

2 ‘‘(3) the overdraft amount; 

3 ‘‘(4) the overdraft coverage fee; 

4 ‘‘(5) the amount necessary to return the ac5 count to a positive balance; 

6 ‘‘(6) whether the participation of a consumer in 

7 an overdraft coverage program will be terminated if 

8 the account is not returned to a positive balance 

9 within a given time period; and 

10 ‘‘(7) information about any alternative over11 draft products as described in this section. 

12 ‘‘(i) TERMINATED OR SUSPENDED COVERAGE.— 

13 Each depository institution shall provide prompt notice to 

14 the consumer, using a reasonable means selected by the 

15 consumer, if the institution terminates or suspends access 

16 to an overdraft coverage program with respect to an ac17 count of the consumer, including a clear rationale for the 

18 action. 

19 ‘‘(j) OVERDRAFT COVERAGE RESTRICTIONS AND FEE

20 LIMITS FOR CHECKS AND AUTOMATIC RECURRING PAY21 MENTS.— 

22 ‘‘(1) FREQUENCY.—A depository institution 

23 may charge not more than 1 overdraft coverage fee 

24 in any single calendar month, and not more than 6 


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1 overdraft coverage fees in any single calendar year, 

2 per transaction account. 

3 ‘‘(2) REASONABLE AND PROPORTIONAL OVER4 DRAFT COVERAGE FEES.— 

5 ‘‘(A) IN GENERAL.—The amount of any 

6 overdraft coverage fee shall be reasonable and 

7 proportional to the cost to the financial institu8 tion in providing the overdraft coverage for that 

9 transaction, including the cost to the financial 

10 institution of funds and other costs directly as11 sociated with the transaction. 

12 ‘‘(B) SAFE HARBOR RULE AUTHORIZED.— 

13 The Bureau, in consultation with the Board of 

14 Governors of the Federal Reserve System, the 

15 Comptroller of the Currency, the Board of Di16 rectors of the Federal Deposit Insurance Cor17 poration, and the National Credit Union Ad18 ministration Board, may issue rules to provide 

19 an amount for any overdraft coverage fee that 

20 is presumed to be reasonable and proportional 

21 to the costs to the financial institution in pro22 viding the overdraft coverage for the trans23 action. 

24 ‘‘(3) POSTING ORDER.—Each depository insti25 tution shall post transactions with respect to transVerDate Sep 11 2014 04:25 Aug 10, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2677.IS S2677

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1 action accounts in such a manner that minimizes 

2 overdraft coverage fees and nonsufficient fund fees. 

3 ‘‘(k) DEBIT HOLDS.—No depository institution may 

4 charge an overdraft coverage fee on any category of trans5 action, if the overdraft results solely from a debit hold 

6 amount placed on a transaction account that exceeds the 

7 actual dollar amount of the transaction. 

8 ‘‘(l) NONDISCRIMINATION FOR NOT OPTING IN.—In 

9 implementing the requirements of this section, each depos10 itory institution shall provide to consumers who have not 

11 consented to participate in an overdraft coverage program 

12 transaction accounts having the same terms, conditions, 

13 or other features as those that are provided to consumers 

14 who have consented to participate in such overdraft cov15 erage program, except for features of such overdraft cov16 erage. 

17 ‘‘(m) NONSUFFICIENT FUND FEE LIMITS.— 

18 ‘‘(1) IN GENERAL.—No depository institution 

19 may charge any nonsufficient fund fee with respect 

20 to— 

21 ‘‘(A) any transaction at an automated tell22 er machine; or 

23 ‘‘(B) any debit card transaction. 

24 ‘‘(2) REASONABLE AND PROPORTIONAL.—Rea25 sonable and proportional nonsufficient fund fees. 


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1 ‘‘(A) IN GENERAL.—The amount of any 

2 nonsufficient fund fee shall be reasonable and 

3 proportional to the cost to the financial institu4 tion directly associated with returning the 

5 transaction. 

6 ‘‘(B) SAFE HARBOR RULE AUTHORIZED.— 

7 The Bureau, in consultation with the Board of 

8 Governors of the Federal Reserve System, the 

9 Comptroller of the Currency, the Board of Di10 rectors of the Federal Deposit Insurance Cor11 poration, and the National Credit Union Ad12 ministration Board, may issue rules to provide 

13 an amount for any non-sufficient fund fee that 

14 is presumed to be reasonable and proportional 

15 to the costs to the financial institution of re16 turning the transaction. 

17 ‘‘(n) REPORTS TO CONSUMER REPORTING AGEN18 CIES.— 

19 ‘‘(1) IN GENERAL.—No depository institution 

20 may report negative information regarding the use 

21 of overdraft coverage by a consumer to any con22 sumer reporting agency, as defined in section 603 of 

23 the Fair Credit Reporting Act (15 U.S.C. 1681a), 

24 when the amounts of the overdraft are repaid under 

25 the terms of an overdraft coverage program. 


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1 ‘‘(2) DELETION.—A depository institution shall 

2 request that the consumer reporting agency de3 scribed in paragraph (1) delete any previously re4 ported negative information, including closure of an 

5 account due to unpaid overdrafts, if the consumer 

6 repays the overdrafts or tenders payment for the 

7 overdrafts to the depository institution or its suc8 cessor. 

9 ‘‘(o) RULE OF CONSTRUCTION.—No provision of this 

10 section may be construed as prohibiting a depository insti11 tution from retaining the discretion to pay, without assess12 ing an overdraft coverage fee or charge, an overdraft in13 curred by a consumer. 

14 ‘‘(p) DEFINITIONS RELATING TO OVERDRAFT COV15 ERAGE.—For purposes of this section: 

16 ‘‘(1) CHECK.—The term ‘check’— 

17 ‘‘(A) has the meaning given the term in 

18 section 3 of the Check Clearing for the 21st 

19 Century Act (12 U.S.C. 5002); and 

20 ‘‘(B) does not include a traveler’s check. 

21 ‘‘(2) DEPOSITORY INSTITUTION.—The term ‘de22 pository institution’ means any entity described in 

23 clauses (i) through (vi) of section 19(b)(1)(A) of the 

24 Federal Reserve Act (12 U.S.C. 461(b)(1)(A)). 


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1 ‘‘(3) NONSUFFICIENT FUND FEE.—The term 

2 ‘nonsufficient fund fee’ means a fee or charge as3 sessed in connection with an overdraft for which a 

4 depository institution declines payment. 

5 ‘‘(4) OVERDRAFT.—The term ‘overdraft’ 

6 means, in a withdrawal by check or other debit from 

7 a consumer transaction account in which there are 

8 insufficient or unavailable funds in the account to 

9 cover such check or debit, the amount of such with10 drawal that exceeds the available funds in the ac11 count. 

12 ‘‘(5) OVERDRAFT COVERAGE.—The term ‘over13 draft coverage’ means the payment of a check pre14 sented or other debit posted against a consumer 

15 transaction account by the depository institution in 

16 which such account is held, even though there are 

17 insufficient or unavailable funds in the account to 

18 cover such checks or other debits. 

19 ‘‘(6) OVERDRAFT COVERAGE FEE.—The term 

20 ‘overdraft coverage fee’— 

21 ‘‘(A) means any fee or charge assessed in 

22 connection with overdraft coverage, or in con23 nection with any negative account balance that 

24 results from overdraft coverage; and 

25 ‘‘(B) does not include— 


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1 ‘‘(i) a periodic rate in connection with 

2 an extension of credit through an overdraft 

3 line of credit program; and 

4 ‘‘(ii) a fee or charge imposed in con5 nection with any transfer from an account 

6 linked to another transaction account. 

7 ‘‘(7) OVERDRAFT COVERAGE PROGRAM.—The 

8 term ‘overdraft coverage program’ means a service 

9 under which a depository institution assesses an 

10 overdraft coverage fee for overdraft coverage. 

11 ‘‘(8) TRANSACTION ACCOUNT.—The term 

12 ‘transaction account’ has the meaning given the 

13 term in section 19(b)(1) of the Federal Reserve Act 

14 (12 U.S.C. 461(b)(1)).’’. 

15 (b) TECHNICAL AMENDMENT.—The table of contents 

16 for chapter 2 of the Truth in Lending Act is amended 

17 by inserting after the item relating to section 140A the 

18 following: 

‘‘140B. Overdraft coverage program disclosures and consumer protection.’’. 

19 SEC. 5. REGULATORY AUTHORITY OF THE CFPB. 

20 Not later than 2 years after the date of the enact21 ment of this Act, the CFPB shall issue such final rules 

22 and publish such model forms as necessary to carry out 

23 section 140B of the Truth in Lending Act, as added by 

24 section 4 of this Act. 


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1 SEC. 6. EFFECTIVE DATE. 

2 (a) IN GENERAL.—This Act and the amendments 

3 made by this Act shall take effect 1 year after the date 

4 of the enactment of this Act, whether or not the rules of 

5 the CFPB under this Act or such amendments are pre6 scribed in final form. 

7 (b) MORATORIUM ON FEE INCREASES.—During the 

8 1-year period beginning on the date of the enactment of 

9 this Act, no depository institution may increase the over10 draft coverage fees or charges assessed on transaction ac11 counts for paying a transaction (including a check or other 

12 debit) in connection with an overdraft or for nonsufficient 

13 funds. 

Æ 


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