II 

116TH CONGRESS 

1ST SESSION S. 1595 

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 

MAY 22, 2019 

Mr. BOOKER (for himself and Mr. BROWN) 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 2019’’. 

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; and 

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. 

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

11 Each depository institution shall provide prompt notice to 

12 the consumer, using a reasonable means selected by the 

13 consumer, if the institution terminates or suspends access 

14 to an overdraft coverage program with respect to an ac15 count of the consumer, including a clear rationale for the 

16 action. 

17 ‘‘(j) OVERDRAFT COVERAGE RESTRICTIONS AND FEE

18 LIMITS FOR CHECKS AND AUTOMATIC RECURRING PAY19 MENTS.— 

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

21 may charge not more than 1 overdraft coverage fee 

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

23 overdraft coverage fees in any single calendar year, 

24 per transaction account. 


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1 ‘‘(2) REASONABLE AND PROPORTIONAL OVER2 DRAFT COVERAGE FEES.— 

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

4 overdraft coverage fee shall be reasonable and 

5 proportional to the cost to the financial institu6 tion in providing the overdraft coverage for that 

7 transaction, including the cost to the financial 

8 institution of funds and other costs directly as9 sociated with the transaction. 

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

11 The Bureau, in consultation with the Board of 

12 Governors of the Federal Reserve System, the 

13 Comptroller of the Currency, the Board of Di14 rectors of the Federal Deposit Insurance Cor15 poration, and the National Credit Union Ad16 ministration Board, may issue rules to provide 

17 an amount for any overdraft coverage fee that 

18 is presumed to be reasonable and proportional 

19 to the costs to the financial institution in pro20 viding the overdraft coverage for the trans21 action. 

22 ‘‘(3) POSTING ORDER.—Each depository insti23 tution shall post transactions with respect to trans24 action accounts in such a manner that minimizes 

25 overdraft coverage fees and nonsufficient fund fees. 


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

2 charge an overdraft coverage fee on any category of trans3 action, if the overdraft results solely from a debit hold 

4 amount placed on a transaction account that exceeds the 

5 actual dollar amount of the transaction. 

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

7 implementing the requirements of this section, each depos8 itory institution shall provide to consumers who have not 

9 consented to participate in an overdraft coverage program 

10 transaction accounts having the same terms, conditions, 

11 or other features as those that are provided to consumers 

12 who have consented to participate in such overdraft cov13 erage program, except for features of such overdraft cov14 erage. 

15 ‘‘(m) NONSUFFICIENT FUND FEE LIMITS.—No de16 pository institution may charge any nonsufficient fund fee 

17 with respect to— 

18 ‘‘(1) any transaction at an automated teller ma19 chine; or 

20 ‘‘(2) any debit card transaction. 

21 ‘‘(n) REPORTS TO CONSUMER REPORTING AGEN22 CIES.— 

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

24 may report negative information regarding the use 

25 of overdraft coverage by a consumer to any conVerDate Sep 11 2014 03:48 May 31, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1595.IS S1595

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1 sumer reporting agency, as defined in section 603 of 

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

3 when the amounts of the overdraft are repaid under 

4 the terms of an overdraft coverage program. 

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

6 request that the consumer reporting agency de7 scribed in paragraph (1) delete any previously re8 ported negative information, including closure of an 

9 account due to unpaid overdrafts, if the consumer 

10 repays the overdrafts or tenders payment for the 

11 overdrafts to the depository institution or its suc12 cessor. 

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

14 section may be construed as prohibiting a depository insti15 tution from retaining the discretion to pay, without assess16 ing an overdraft coverage fee or charge, an overdraft in17 curred by a consumer. 

18 ‘‘(p) DEFINITIONS RELATING TO OVERDRAFT COV19 ERAGE.—For purposes of this section: 

20 ‘‘(1) CHECK.—The term ‘check’— 

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

22 section 3 of the Check Clearing for the 21st 

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

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


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1 ‘‘(2) DEPOSITORY INSTITUTION.—The term ‘de2 pository institution’ means any entity described in 

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

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

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

6 ‘nonsufficient fund fee’ means a fee or charge as7 sessed in connection with an overdraft for which a 

8 depository institution declines payment. 

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

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

11 a consumer transaction account in which there are 

12 insufficient or unavailable funds in the account to 

13 cover such check or debit, the amount of such with14 drawal that exceeds the available funds in the ac15 count. 

16 ‘‘(5) OVERDRAFT COVERAGE.—The term ‘over17 draft coverage’ means the payment of a check pre18 sented or other debit posted against a consumer 

19 transaction account by the depository institution in 

20 which such account is held, even though there are 

21 insufficient or unavailable funds in the account to 

22 cover such checks or other debits. 

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

24 ‘overdraft coverage fee’— 


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

2 connection with overdraft coverage, or in con3 nection with any negative account balance that 

4 results from overdraft coverage; and 

5 ‘‘(B) does not include— 

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

7 an extension of credit through an overdraft 

8 line of credit program; and 

9 ‘‘(ii) a fee or charge imposed in con10 nection with any transfer from an account 

11 linked to another transaction account. 

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

13 term ‘overdraft coverage program’ means a service 

14 under which a depository institution assesses an 

15 overdraft coverage fee for overdraft coverage. 

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

17 ‘transaction account’ has the meaning given the 

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

19 (12 U.S.C. 461(b)(1)).’’. 

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

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

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

23 following: 

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


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1 SEC. 5. REGULATORY AUTHORITY OF THE CFPB. 

2 Not later than 2 years after the date of the enact3 ment of this Act, the CFPB shall issue such final rules 

4 and publish such model forms as necessary to carry out 

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

6 section 4 of this Act. 

7 SEC. 6. EFFECTIVE DATE. 

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

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

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

11 the CFPB under this Act or such amendments are pre12 scribed in final form. 

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

14 1-year period beginning on the date of the enactment of 

15 this Act, no depository institution may increase the over16 draft coverage fees or charges assessed on transaction ac17 counts for paying a transaction (including a check or other 

18 debit) in connection with an overdraft or for nonsufficient 

19 funds. 

Æ 


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