I 
111TH CONGRESS 
1ST SESSION H. R. 3904 
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 depository institutions, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 22, 2009 
Mrs. MALONEY (for herself, Mr. FRANK of Massachusetts, Ms. WATERS, Mr. 
MAFFEI, Mr. MILLER of North Carolina, Mr. HINOJOSA, Ms. MOORE of 
Wisconsin, Mr. HODES, Mr. CAPUANO, Mr. ACKERMAN, Mr. KANJORSKI, 
Mr. ELLISON, Mr. GUTIERREZ, Ms. SPEIER, Ms. ESHOO, and Mr. 
JONES) introduced the following bill; which was referred to the Com-
mittee on Financial 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 depository 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, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Overdraft Protection 
Act of 2009’’. 
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SEC. 2. FINDINGS AND PURPOSE. 
Section 102 of the Truth in Lending Act (15 U.S.C. 
1601) is amended by adding at the end the following new 
subsection: 
‘‘(c) FAIRNESS
AND ACCOUNTABILITY
IN OVER-
DRAFT COVERAGE.— 
‘‘(1) FINDINGS.—The Congress also finds 
that— 
‘‘(A) overdraft coverage is a form of short- 
term credit that depository institutions provide 
for consumer transaction accounts. Historically, 
depository institutions covered overdrafts for a 
fee on an ad hoc basis; 
‘‘(B) with the growth in specially designed 
software programs and in consumer use of debit 
cards, overdraft coverage for a fee has become 
more prevalent; 
‘‘(C) most depository institutions do not 
notify consumers when adding this feature to 
their transaction accounts, and some do not 
permit consumers to eliminate this feature from 
such accounts; 
‘‘(D) most depository institutions collect a 
high flat fee, including for small dollar trans-
actions, each time the institution covers an 
overdraft, in some cases impose multiple over-
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draft coverage fees within a single day, and 
many charge additional fees for each day dur-
ing which the account remains overdrawn; and 
‘‘(E) such abusive and misleading practices 
in connection with overdraft coverage fees have 
deprived consumers of meaningful choices about 
their accounts and placed significant financial 
burdens on low- and moderate-income con-
sumers. 
‘‘(2) PURPOSE.—It is the purpose of this title 
to protect consumers by limiting abusive and mis-
leading 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 103 of the 
Truth in Lending Act (15 U.S.C. 1602) is amended by 
adding at the end the following new subsection: 
‘‘(cc) DEFINITIONS RELATING TO OVERDRAFT COV-
ERAGE.— 
‘‘(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. 
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‘‘(2) DEPOSITORY INSTITUTION.—The term ‘de-
pository institution’ has the same meaning as in 
clauses (i) through (vi) of section 19(b)(1)(A) of the 
Federal Reserve Act (12 U.S.C. 461(b)(1)(A)). 
‘‘(3) NONSUFFICIENT
FUND
FEE.—The term 
‘nonsufficient fund fee’ means a fee or charge as-
sessed in connection with an overdraft for which a 
depository institution declines payment. 
‘‘(4) OVERDRAFT.—The term ‘overdraft’ means 
the amount of a withdrawal by check or other debit 
from a transaction account in which there are insuf-
ficient or unavailable funds in the account to cover 
such check or debit. 
‘‘(5) OVERDRAFT COVERAGE.—The term ‘over-
draft coverage’ means the payment of a check pre-
sented or other debit posted against a transaction 
account by the depository institution in which such 
account is held, even though there are insufficient or 
unavailable funds in the account to cover such 
checks or other debits. 
‘‘(6) OVERDRAFT COVERAGE FEE.—The term 
‘overdraft coverage fee’ means any fee or charge as-
sessed in connection with overdraft coverage, or in 
connection with any negative account balance that 
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results from overdraft coverage, unless such fee or 
charge is imposed in connection with— 
‘‘(A) an extension 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 Overdraft Protection Act 
of 2009; or 
‘‘(B) any transfer from an account linked 
to another transaction 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 depository institution assesses an 
overdraft coverage fee for overdraft coverage. 
‘‘(8) 
TRANSACTION
ACCOUNT.—The 
term 
‘transaction account’ has the same meaning as in 
section 19(b)(1)(C) of the Federal Reserve Act (12 
U.S.C. 461(b)(1)(C)).’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
107(5)(A)(vi) of the Federal Credit Union Act (12 U.S.C. 
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1757(5)(A)(vi)) is amended by inserting ‘‘, other than an 
overdraft coverage fee, as defined in section 103(cc) of the 
Truth in Lending Act (12 U.S.C. 1602(cc))’’ after ‘‘inclu-
sive of all finance charges’’. 
SEC. 4. FAIR MARKETING AND PROVISION OF OVERDRAFT 
COVERAGE PROGRAMS. 
Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 140B. OVERDRAFT COVERAGE PROGRAM DISCLO-
SURES AND CONSUMER PROTECTION. 
‘‘(a) PROHIBITIONS.—No depository 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 depository 
institution that provides or offers to provide overdraft cov-
erage with respect to transaction accounts held at that de-
pository institution shall clearly and conspicuously disclose 
in all marketing materials for such overdraft coverage any 
overdraft coverage fees. 
‘‘(c) CONSUMER CONSENT OPT-IN.—A depository in-
stitution may charge overdraft coverage fees only if the 
consumer has consented in writing, in electronic form, or 
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in such other form as is permitted under regulations of 
the Board. 
‘‘(d) CONSUMER DISCLOSURES.—Each depository in-
stitution shall clearly disclose to each consumer covered 
by an overdraft protection program of that depository in-
stitution— 
‘‘(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 transaction account; and 
‘‘(B) the depository 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) information about any alternative over-
draft products that are available, including a clear 
explanation of how the terms and fees for such alter-
native services and products differ; and 
‘‘(3) such other information as the Board may 
require, by rule. 
‘‘(e) PERIODIC STATEMENTS.—Each depository insti-
tution that offers an overdraft coverage program shall, in 
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each periodic statement for any transaction account that 
has an overdraft coverage program feature, clearly disclose 
to the consumer the dollar amount of all overdraft cov-
erage fees charged to the consumer for the relevant period 
and year to date. 
‘‘(f) EXCLUSION FROM ACCOUNT BALANCE INFOR-
MATION.—No depository institution may include the 
amount available under the overdraft coverage program of 
a consumer as part of the transaction account balance of 
that consumer. 
‘‘(g) PROMPT NOTIFICATION.—Each depository insti-
tution shall promptly notify consumers, through a reason-
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 
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the account is not returned to a positive balance 
within a given time period. 
‘‘(h) TERMINATED
OR SUSPENDED COVERAGE.— 
Each depository 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) NOTICE AND OPPORTUNITY TO CANCEL.—Each 
depository institution shall— 
‘‘(1) warn any consumer covered by an over-
draft coverage program who engages in a trans-
action through an automated teller machine or a 
branch teller if completing the transaction would 
trigger overdraft coverage fees, including the amount 
of the fees; and 
‘‘(2) provide to the consumer the opportunity to 
cancel the transaction before it is completed. 
‘‘(j) OVERDRAFT COVERAGE FEE LIMITS.— 
‘‘(1) FREQUENCY.—A depository 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 transaction account. 
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‘‘(2) REASONABLE AND PROPORTIONAL OVER-
DRAFT COVERAGE FEES.— 
‘‘(A) IN GENERAL.—The amount of any 
overdraft coverage fee that a depository institu-
tion may assess for paying a transaction (in-
cluding a check or other debit) shall be reason-
able and proportional to the cost of processing 
the transaction. 
‘‘(B) SAFE HARBOR RULE AUTHORIZED.— 
The Board, in consultation with the Comp-
troller of the Currency, the Board of Directors 
of the Federal Deposit Insurance Corporation, 
the Director of the Office of Thrift Supervision, 
and the National Credit Union Administration 
Board, may issue rules to provide an amount 
for any overdraft coverage fee that is presumed 
to be reasonable and proportional to the actual 
cost of processing the transaction. 
‘‘(3) POSTING ORDER.—In order to minimize 
overdraft coverage fees charged to consumers, each 
depository institution shall post transactions with re-
spect to transaction accounts in such a manner that 
the consumer does not incur avoidable overdraft cov-
erage fees. 
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‘‘(k) DEBIT HOLDS.—No depository institution may 
charge an overdraft coverage fee on any category of trans-
action, if the overdraft results solely from a debit hold 
amount placed on a transaction account that exceeds the 
actual dollar amount of the transaction. 
‘‘(l) NONDISCRIMINATION FOR NOT OPTING IN.—In 
implementing the requirements of this section, each depos-
itory institution shall provide to consumers who have not 
consented to participate in an overdraft coverage program, 
transaction accounts having the same terms, conditions, 
or other features as those that are provided to consumers 
who have consented to participate in such overdraft cov-
erage program, except for features of such overdraft cov-
erage. 
‘‘(m) NONSUFFICIENT FUND FEE LIMITS.—No de-
pository institution may charge any nonsufficient fund fee 
with respect to— 
‘‘(1) any transaction at an automated teller ma-
chine; or 
‘‘(2) any debit card transaction. 
‘‘(n) REPORTS
TO CONSUMER REPORTING AGEN-
CIES.—No depository institution may report negative in-
formation regarding the use of overdraft coverage by a 
consumer to any consumer reporting agency (as that term 
is defined in section 603 of the Fair Credit Reporting Act 
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(15 U.S.C. 1681a)) when the overdraft amounts and over-
draft coverage fees are paid under the terms of an over-
draft coverage program. 
‘‘(o) RULE OF CONSTRUCTION.—No provision of this 
section may be construed as prohibiting a depository insti-
tution from retaining the discretion to pay, without assess-
ing an overdraft coverage fee or charge, an overdraft in-
curred by a consumer.’’. 
SEC. 5. REGULATORY AUTHORITY OF THE BOARD. 
(a) IN GENERAL.—Not later than 9 months after the 
date of the enactment of this Act (except as provided in 
subsection (b)), the Board of Governors of the Federal Re-
serve System (hereafter in this Act referred to as the 
‘‘Board’’), in consultation with the Comptroller of the Cur-
rency, the Board of Directors of the Federal Deposit In-
surance Corporation, the Director of the Office of Thrift 
Supervision, and the National Credit Union Administra-
tion Board, shall issue such final rules and publish such 
model forms as necessary to carry out section 140B of 
the Truth in Lending Act, as added by this Act. 
(b) BOARD AUTHORITY REGARDING ADDITIONAL 
WARNINGS.—The Board may, by rule, after taking into 
account the findings of the Comptroller General of the 
United States under section 6, require warnings at loca-
tions such as point-of-sale transfer terminals or other loca-
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tions, that are similar to those required under section 
140B(i) of the Truth in Lending Act, as added by this 
Act, where feasible, and if the cost of providing such warn-
ings does not outweigh the benefit to consumers. 
SEC. 6. STUDY AND REPORT BY THE GAO. 
(a) STUDY.— 
(1) IN GENERAL.—The Comptroller General of 
the United States shall conduct a study regarding 
whether it is feasible for a depository institution— 
(A) to provide a warning to a consumer at 
a point-of-sale transfer terminal that com-
pleting a transfer may trigger overdraft cov-
erage fees; and 
(B) to provide the consumer with the op-
portunity to cancel the point-of-sale transfer be-
fore the transaction is completed. 
(2) CONSIDERATIONS.—In conducting the study 
under this subsection, the Comptroller General shall 
evaluate— 
(A) the benefits to consumers of a point- 
of-sale transfer overdraft warning and oppor-
tunity to cancel; 
(B) the availability of technology to pro-
vide such a warning and opportunity; and 
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(C) the cost of providing such warning and 
opportunity. 
(b) REPORT TO CONGRESS.—Not later than 1 year 
after the date of enactment of this Act, the Comptroller 
General shall submit a report to Congress on the results 
of the study conducted under subsection (a). 
(c) DEFINITIONS.—As used in this section, the terms 
‘‘overdraft coverage program’’, ‘‘overdraft coverage fee’’, 
and ‘‘depository institution’’ have the same meanings as 
in section 103(cc) of the Truth in Lending Act, as added 
by this Act. 
SEC. 7. EFFECTIVE DATE. 
(a) IN GENERAL.—This Act and the amendments 
made by this Act shall take effect 1 year after the date 
of the enactment of this Act, whether or not the rules of 
the Board under this Act or such amendments are pre-
scribed in final form. 
(b) MORATORIUM ON FEE INCREASES.— 
(1) IN GENERAL.—During the 1-year period be-
ginning on the date of the enactment of this Act, no 
depository institution may increase the overdraft 
coverage fees or charges assessed on transaction ac-
counts for paying a transaction (including a check or 
other debit) in connection with an overdraft or for 
nonsufficient funds. 
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(2) DEFINITIONS.—As used in this section, the 
terms ‘‘depository institution’’, ‘‘overdraft’’, ‘‘over-
draft coverage fee’’, ‘‘transaction account’’ and 
‘‘nonsufficient fund fee’’ have the same meanings as 
in section 103(cc) of the Truth in Lending Act, as 
added by this Act. 
Æ 
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