I 
117TH CONGRESS 
1ST SESSION H. R. 4277 
To amend the Truth in Lending Act to establish fair and transparent prac-
tices related to the marketing and provision of overdraft coverage pro-
grams at financial institutions, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 30, 2021 
Mrs. CAROLYN B. MALONEY of New York (for herself, Mr. CARSON, Mr. 
CICILLINE, Mr. COHEN, Mr. DANNY K. DAVIS of Illinois, Mr. FOSTER, 
Mr. GARCI´A of Illinois, Ms. GARCIA of Texas, Mr. GRIJALVA, Mrs. 
HAYES, Mr. KHANNA, Mr. LAWSON of Florida, Mr. LYNCH, Mr. MCGOV-
ERN, Ms. MOORE of Wisconsin, Ms. NEWMAN, Ms. NORTON, Mr. PAYNE, 
Mr. RASKIN, Miss RICE of New York, Mr. RUSH, Mr. SAN NICOLAS, Ms. 
SCHAKOWSKY, Mr. SHERMAN, Mr. SIRES, Mr. SUOZZI, Mr. TAKANO, Ms. 
TLAIB, Mr. TORRES of New York, Mr. TRONE, and Ms. VELA´ZQUEZ) in-
troduced the following bill; which was referred to the Committee on Fi-
nancial Services 
A BILL 
To amend the Truth in Lending Act to establish fair and 
transparent practices related to the marketing and provi-
sion of overdraft coverage programs at financial institu-
tions, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Overdraft Protection 
Act of 2021’’. 
SEC. 2. FINDINGS AND PURPOSE. 
(a) FINDINGS.—The Congress finds the following: 
(1) Overdraft coverage is a form of short-term 
credit that financial institutions market for con-
sumer accounts. Historically, financial institutions 
covered overdrafts for a fee on an ad hoc basis. 
(2) With the growth in specially designed soft-
ware programs and in consumer use of debit cards, 
overdraft coverage for a fee has become more preva-
lent. 
(3) Many financial institutions market a range 
of overdraft options but aggressively encourage con-
sumers to consent to the most expensive option, 
where a high flat fee is collected for every individual 
overdraft transaction. 
(4) Many financial institutions collect a high 
flat fee, including for small dollar transactions, each 
time the institution covers an overdraft, impose mul-
tiple overdraft coverage fees within a single day, and 
charge additional fees for each day during which the 
account remains overdrawn. 
(5) Such abusive practices in connection with 
overdraft coverage fees have deprived consumers of 
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meaningful options and placed significant financial 
burdens on low- and moderate-income consumers. 
(6) African Americans and Latinos are dis-
proportionately harmed by overdraft coverage fees 
and more likely to pay multiple overdraft coverage 
fees annually. 
(b) PURPOSE.—It is the purpose of this Act to pro-
tect consumers by limiting abusive overdraft coverage fees 
and practices, and by providing meaningful disclosures 
and consumer choice in connection with overdraft coverage 
fees. 
SEC. 3. DEFINITIONS. 
(a) ADDITIONAL DEFINITIONS.—Section 140B of the 
Truth in Lending Act, as added by section 4, is amended 
by adding at the end the following new subsection: 
‘‘(o) DEFINITIONS RELATING TO OVERDRAFT COV-
ERAGE.—For purposes of this section: 
‘‘(1) CHECK.—The term ‘check’ has the same 
meaning as in section 3(6) of the Check Clearing for 
the 21st Century Act (12 U.S.C. 5001 et seq.), 
other than a travelers check. 
‘‘(2) FINANCIAL INSTITUTION.—The term ‘fi-
nancial institution’ has the same meaning as in the 
Electronic Fund Transfer Act (15 U.S.C. 1693a(9)). 
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or charge was considered a finance charge 
under this title as in effect immediately prior to 
the enactment of the Overdraft Protection Act 
of 2021; or 
‘‘(B) any transfer from an account linked 
to another account. 
Such fee shall be considered a ‘finance charge’ for 
purposes of section 106(a), but shall not be included 
in the calculation of the rate of interest for purposes 
of section 107(5)(A)(vi) of the Federal Credit Union 
Act (12 U.S.C. 1757(5)(A)(vi)). 
‘‘(7) OVERDRAFT
COVERAGE
PROGRAM.—The 
term ‘overdraft coverage program’ means a service 
under which a financial institution assesses an over-
draft coverage fee for overdraft coverage. 
‘‘(8) ACCOUNT.—The term ‘account’ has the 
same meaning as in the Electronic Fund Transfer 
Act (15 U.S.C. 1693a(2)).’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
107(5)(A)(vi) of the Federal Credit Union Act (12 U.S.C. 
1757(5)(A)(vi)) is amended by inserting ‘‘, other than an 
overdraft coverage fee, as defined in section 140B(o) of 
the Truth in Lending Act’’ after ‘‘inclusive of all finance 
charges’’. 
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SEC. 4. FAIR MARKETING AND PROVISION OF OVERDRAFT 
COVERAGE PROGRAMS. 
(a) IN GENERAL.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631 et seq.) is amended by adding 
at the end the following new section: 
‘‘§ 140B. Overdraft coverage program disclosures and 
consumer protection 
‘‘(a) PROHIBITIONS.—No financial institution may 
engage in acts or practices in connection with the mar-
keting of or the provision of overdraft coverage that are 
unfair, deceptive, or designed to evade the provisions of 
this section. 
‘‘(b) MARKETING DISCLOSURES.—Each financial in-
stitution that provides or offers to provide overdraft cov-
erage with respect to accounts held at that financial insti-
tution shall clearly and conspicuously disclose in all mar-
keting materials for such overdraft coverage— 
‘‘(1) any overdraft coverage fees with respect to 
such overdraft coverage; and 
‘‘(2) that by not opting in to such overdraft 
coverage— 
‘‘(A) a consumer’s transaction may be de-
clined if there are insufficient funds in the re-
lated account; and 
‘‘(B) the consumer will not be charged a 
fee if such transaction is declined. 
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‘‘(c) CONSUMER CONSENT OPT-IN.—A financial in-
stitution may charge overdraft coverage fees with respect 
to the use of an automatic teller machine or point of sale 
transaction only if the consumer has consented in writing, 
in electronic form, or in such other form as is permitted 
under regulations of the Bureau. 
‘‘(d) CONSUMER DISCLOSURES.—Each financial in-
stitution shall clearly disclose to each consumer covered 
by an overdraft coverage program of that financial institu-
tion— 
‘‘(1) that— 
‘‘(A) the consumer may be charged for not 
more than one overdraft coverage fee in any 
single calendar month and not more than 6 
overdraft coverage fees in any single calendar 
year, per account; and 
‘‘(B) the financial institution retains the 
discretion to pay (without assessing an over-
draft coverage fee) or reject overdrafts incurred 
by the consumer beyond the numbers described 
in subparagraph (A); 
‘‘(2) the overdraft coverage fee as an annual 
percentage rate, so as to permit consumers to mean-
ingfully compare the overdraft coverage to alter-
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native forms of overdraft options and other sources 
of credit; 
‘‘(3) information about any alternative over-
draft products that are available (such as linked ac-
counts, lines of credit, and alerts), including a clear 
explanation of how the terms and fees for such alter-
native services and products differ; and 
‘‘(4) such other information as the Bureau may 
require, by rule. 
‘‘(e) PERIODIC STATEMENTS.—Each financial insti-
tution that offers an overdraft coverage program shall, in 
each periodic statement for any account that has an over-
draft coverage program feature, clearly disclose to the con-
sumer the dollar amount of all overdraft coverage fees and 
nonsufficient fund fees charged to the consumer for the 
relevant period and year to date. 
‘‘(f) EXCLUSION FROM ACCOUNT BALANCE INFOR-
MATION.—No financial institution may include the 
amount available under the overdraft coverage program of 
a consumer as part of the account balance of that con-
sumer and the account balance shall be more prominently 
displayed than any amount available under the overdraft 
coverage program. 
‘‘(g) PROMPT NOTIFICATION.—Each financial insti-
tution shall promptly notify consumers, through a reason-
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able means selected by the consumer, when overdraft cov-
erage has been accessed with respect to the account of 
the consumer, not later than on the day on which such 
access occurs, including— 
‘‘(1) the date of the transaction; 
‘‘(2) the type of transaction; 
‘‘(3) the overdraft amount; 
‘‘(4) the overdraft coverage fee; 
‘‘(5) the amount necessary to return the ac-
count to a positive balance; and 
‘‘(6) whether the participation of a consumer in 
an overdraft coverage program will be terminated if 
the account is not returned to a positive balance 
within a given time period. 
‘‘(h) TERMINATED
OR SUSPENDED COVERAGE.— 
Each financial institution shall provide prompt notice to 
the consumer, using a reasonable means selected by the 
consumer, if the institution terminates or suspends access 
to an overdraft coverage program with respect to an ac-
count of the consumer, including a clear rationale for the 
action. 
‘‘(i) OVERDRAFT COVERAGE FEE LIMITS.— 
‘‘(1) NOTICE AND OPPORTUNITY TO CANCEL.— 
Each financial institution shall— 
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‘‘(A) warn any consumer covered by an 
overdraft coverage program who engages in a 
transaction through an automated teller ma-
chine or a branch teller if completing the trans-
action would trigger overdraft coverage fees, in-
cluding the amount of the fees; and 
‘‘(B) provide to the consumer the oppor-
tunity to cancel the transaction before it is 
completed. 
‘‘(2) FREQUENCY.—A financial institution may 
charge not more than one overdraft coverage fee in 
any single calendar month, and not more than 6 
overdraft coverage fees in any single calendar year, 
per account. 
‘‘(3) REASONABLE AND PROPORTIONAL OVER-
DRAFT COVERAGE FEES.— 
‘‘(A) IN GENERAL.—The amount of any 
overdraft coverage fee that a financial institu-
tion may assess for paying a transaction (in-
cluding a check or other debit) shall be reason-
able and proportional to— 
‘‘(i) the amount of the overdraft; and 
‘‘(ii) the cost to the financial institu-
tion in providing the overdraft coverage for 
that transaction. 
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