Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Consumer Overdraft 
Protection Fair Practices Act’’. 
SEC. 2. RESTRICTIONS ON OVERDRAFT PROTECTION PRO-
GRAMS OR SERVICES. 
(a) TRUTH IN LENDING ACT AMENDMENTS.— 
(1) DEFINITION.—Section 103 of the Truth in 
Lending Act (15 U.S.C. 1602) is amended by add-
ing at the end the following new subsection: 
‘‘(cc) TERMS RELATING TO SHORT-TERM EXTEN-
SIONS OF CREDIT UNDER OVERDRAFT PROTECTION PRO-
GRAMS.— 
‘‘(1) OVERDRAFT PROTECTION FEE.—The term 
‘overdraft protection fee’ means any fee or charge 
imposed in connection with any account on which 
checks or other debits are paid by the institution in 
which such account is held even though there are in-
sufficient funds in the account to cover such checks 
or other debits, unless such fee or charge— 
‘‘(A) is imposed on an incidental basis as 
a customer accommodation and no more than 3 
such overdraft fees are imposed during any cal-
endar year; 
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‘‘(B) is imposed in connection with an ex-
tension of credit through an overdraft line of 
credit program where such fee or charge was 
considered a finance charge under this title, as 
in effect immediately prior to the enactment of 
the Consumer Overdraft Protection Fair Prac-
tices Act; or 
‘‘(C) has been disclosed in connection with 
a program under which the overdraft is covered 
by funds transferred from another deposit, 
share, or other asset account. 
‘‘(2) OTHER TERMS.— 
‘‘(A) CHECK.—The term ‘check’ has the 
same meaning as in section 3(6) of the Check 
Clearing for the 21st Century Act. 
‘‘(B) OTHER
DEBITS.—The term ‘other 
debits’ includes withdrawals from an account by 
the consumer through an automated teller ma-
chine and electronic fund transfers from an ac-
count that are initiated or authorized by the 
consumer. 
‘‘(C) ELECTRONIC FUND TRANSFER.—The 
term ‘electronic fund transfer’ has the same 
meaning as in section 903. 
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‘‘(D) 
ACCOUNT.—The 
term 
‘account’ 
means any account intended for use by and 
generally used by a consumer primarily for per-
sonal, family, or household purposes into which 
the consumer deposits funds. 
‘‘(E) TRANSACTION ACCOUNT.—The term 
‘transaction account’ has the same meaning as 
in section 19(b)(1)(C) of the Federal Reserve 
Act.’’. 
(2) RESTRICTIONS ON OVERDRAFT PROTECTION 
PROGRAMS OR SERVICES.— 
(A) IN GENERAL.—Chapter 2 of the Truth 
in Lending Act (15 U.S.C. 1631 et seq.) is 
amended by adding at the end the following 
new section: 
‘‘§ 140A. Restrictions on overdraft protection pro-
grams or services 
‘‘(a) IN GENERAL.—In the case of any transaction 
account of a consumer at any institution, no overdraft pro-
tection fee may be imposed on such account for any exten-
sion of funds by the institution to cover any check or other 
debit for which there are insufficient funds in the con-
sumer’s account to pay such check or other debit, unless— 
‘‘(1) the consumer has provided specific written 
consent to any program or service that provides for 
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charging of such fees in connection with any such 
extension of funds; 
‘‘(2) such fee is imposed pursuant to the terms 
of a written agreement with the consumer which dis-
closes, in a clear and conspicuous manner— 
‘‘(A) the amount of any fee imposed in 
connection with paying an overdraft; 
‘‘(B) any applicable disclosure required by 
this title in connection with such extension of 
credit, including the disclosures required by sec-
tion 127; 
‘‘(C) the categories of transactions for 
which a fee for payment of an overdraft may be 
imposed, including whether an overdraft created 
by withdrawals at automated teller machines or 
other electronic fund transfers will be covered 
and a fee imposed; 
‘‘(D) the time period by which the con-
sumer must repay or cover any extension of 
credit in the form of payment of an overdraft; 
and 
‘‘(E) the circumstances under which the 
institution in which an account is held will not 
pay an overdraft; and 
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‘‘(F) other information required to be dis-
closed by regulation; 
‘‘(3) such fee is separately and conspicuously 
disclosed, each time the fee is imposed, in any peri-
odic statement provided to the consumer with re-
spect to such account and is included in the calcula-
tion of the annual percentage rate as required by 
sections 107 and 127(b)(6). 
‘‘(b) CLARIFICATION
RELATING
TO
OVERDRAFT 
FEES.—In the case of any transaction account of a con-
sumer at any institution, the prohibition against an over-
draft protection fee under subsection (a) shall apply re-
gardless of whether the amount of such fee is the same 
as, or less than, any fee imposed by the institution with 
respect to such account for a check or other debit that 
is returned unpaid. 
‘‘(c) PROHIBITION
ON MISREPRESENTATIONS.—If 
any institution— 
‘‘(1) will not extend funds under specific cir-
cumstances to cover an overdraft in any transaction 
account of a consumer at the institution; or 
‘‘(2) reserves the right to extend funds to pay 
any such overdraft on a discretionary basis, 
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any representation by such institution that the institution 
will extend credit to cover all overdrafts on such account 
shall be a violation of this title.’’. 
(B) CLERICAL AMENDMENT.—The table of 
sections for chapter 2 of the Truth in Lending 
Act is amended by inserting after the item re-
lating to section 140 the following new item: 
‘‘140A. Restrictions on overdraft protection programs or services.’’. 
(3) RESTRICTIONS ON ADVERTISING OF OVER-
DRAFT PROTECTION PROGRAMS OR SERVICES.— 
(A) IN GENERAL.—Chapter 3 of the Truth 
in Lending Act (15 U.S.C. 1661 et seq.) is 
amended by adding at the end the following 
new section: 
‘‘§ 148. Restrictions on advertising of overdraft pro-
tection programs or services 
‘‘(a) IN GENERAL.—In the case of an institution that 
maintains transaction accounts for consumers and offers 
a program or service under which the institution pays any 
overdraft on the account in exchange for payment of an 
overdraft protection fee, the institution may not make any 
of the following representations or statements with respect 
to such program or service in any advertisement or pro-
motion: 
‘‘(1) Any representation or statement describing 
a transaction account as free or no cost if the ac-
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count includes, or is promoted as including, over-
draft protection services that involve the payment of 
overdraft protection fees. 
‘‘(2) Any representation or statement encour-
aging use of the account as a service to meet short- 
term credit needs or to obtain advances on a con-
sumer’s next payment of salary, wages, benefits, or 
other income. 
‘‘(3) Any representation or statement that the 
financial institution will honor all checks or other 
debits presented against the account, if the institu-
tion retains discretion at any time not to honor any 
check or other debit presented. 
‘‘(b) REGULATIONS.—The Board shall prescribe reg-
ulations implementing the restrictions set forth in sub-
section (a) pursuant to the authority of the Board under 
section 18(f) of the Federal Trade Commission Act, and 
may, by regulation or order, restrict such additional acts 
or practices that the Board finds to be unfair or deceptive 
in connection with the offering, operation, and advertising 
of overdraft protection programs and services.’’. 
(B) CLERICAL AMENDMENT.—The table of 
sections for chapter 3 of the Truth in Lending 
Act is amended by inserting after the item re-
lating to section 147 the following new item: 
‘‘148. Restrictions on advertising of overdraft protection programs or services.’’. 
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(4) CLARIFICATION
OF
FINANCE
CHARGE.— 
Section 106(a) of the Truth in Lending Act (15 
U.S.C. 1605(a)) is amended by adding at the end 
the following new paragraph: 
‘‘(7) Overdraft protection fee.’’. 
(b) ELECTRONIC FUND TRANSFER ACT AMEND-
MENTS.—Section 904 of the Electronic Fund Transfer 
Act (15 U.S.C. 1693b) is amended by adding at the end 
the following new subsection: 
‘‘(e) RESTRICTIONS
ON OVERDRAFT PROTECTION 
SERVICES AND FEES.— 
‘‘(1) IN GENERAL.—A financial institution that 
holds a consumer’s account may not impose an over-
draft protection fee on the account in connection 
with any payment of an electronic fund transfer ini-
tiated by the consumer at an automated teller ma-
chine in spite of a lack of sufficient funds in the 
consumer’s account to pay such electronic fund 
transfer, unless— 
‘‘(A) the consumer has affirmatively re-
quested such service pursuant to section 
140(a)(1), including specific consent to allowing 
overdrafts at an automated teller machine or by 
debit card at a point-of-sale terminal; 
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‘‘(B) the financial has provided a notice to 
the consumer after the transaction is initiated 
and before the consumer is irrevocably com-
mitted to completing the transaction, that the 
electronic fund transfer the consumer has re-
quested will result in an overdraft protection 
fee, together with the amount of any such fee; 
‘‘(C) the consumer elects to continue in the 
manner necessary to effect the requested elec-
tronic fund transfer after receiving such notice; 
and 
‘‘(D) the overdraft protection fee imposed 
in connection with such transaction is clearly 
disclosed in the written documentation of the 
electronic fund transfer required by section 
906(a). 
‘‘(2) PROHIBITION ON FEE IN ABSENCE OF NO-
TICE.—If the notice required by paragraph (1)(B) is 
not feasible, the financial institution may not charge 
an overdraft protection fee in connection with any 
payment of an electronic fund transfer initiated by 
the consumer at an automated teller machine or by 
debit card at a point-of-sale terminal in spite of a 
lack of sufficient funds in the consumer’s account to 
pay such electronic fund transfer. 
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‘‘(3) DISCLOSURE OF ACCOUNT BALANCES.—In 
the case of any financial institution that offers a 
program or service under which the institution pays 
any overdraft on a consumer’s account in exchange 
for the imposition of an overdraft protection fee in 
accordance with paragraph (1), the financial institu-
tion shall, in response to a balance inquiry initiated 
by the consumer at an automated teller machine op-
erated by the financial institution, disclose only the 
actual dollar balance in the consumer’s account at 
the time of the request, which shall not include any 
additional amount of credit or overdraft protection 
the financial institution will pay under any agree-
ment with the consumer that permits the imposition 
of the overdraft protection fee. 
‘‘(4) 
OVERDRAFT
PROTECTION
FEE
DE-
FINED.—For purposes of this subsection, the term 
‘overdraft protection fee’ has the same meaning as 
in section 103(cc)(1).’’. 
(c) EXPEDITED FUNDS AVAILABILITY ACT AMEND-
MENTS.— 
(1) DEFINITION.—Section 602 of the Expedited 
Funds Availability Act (12 U.S.C. 4001) is amended 
by adding at the end the following new paragraph: 
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‘‘(26) OVERDRAFT
PROTECTION
FEE.—The 
term ‘overdraft protection fee’ has the same meaning 
as in section 103(cc)(1) of the Truth in Lending 
Act.’’. 
(2) RESTRICTIONS ON OVERDRAFT PROTECTION 
FEES.—Section 607 of the Expedited Funds Avail-
ability Act (12 U.S.C. 4006) is amended by adding 
at the end the following new subsection: 
‘‘(f) RESTRICTIONS
ON OVERDRAFT PROTECTION 
FEES.—A depository institution may not— 
‘‘(1) impose an overdraft protection fee on an 
account at such institution for paying any check 
drawn on the account in spite of a lack of sufficient 
funds in the account to pay such check or any simi-
lar activity unless the accountholder has affirma-
tively requested such service pursuant to section 
140(a)(1) of the Truth in Lending Act; or 
‘‘(2) engage in a pattern or practice of delaying 
the posting of any deposit in an account, or manipu-
lating the process of posting any check or other 
debit against an account, if such pattern or practice 
results in 1 or more overdrafts that trigger payment 
by the accountholder of an overdraft protection 
fee.’’. 
Æ 
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