I 
112TH CONGRESS 
2D SESSION 
H. R. 5691 
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 
MAY 9, 2012 
Mrs. MALONEY (for herself, Mr. FRANK of Massachusetts, Mr. CAPUANO, Mr. 
ELLISON, Mr. GUTIERREZ, Mr. MORAN, Mr. JACKSON of Illinois, Ms. 
RICHARDSON, Mr. VAN HOLLEN, Mr. SERRANO, Mr. CICILLINE, Mr. 
DINGELL, Mr. MILLER of North Carolina, Mr. RANGEL, Ms. CHU, Ms. 
SCHAKOWSKY, Mr. GRIJALVA, Mr. BLUMENAUER, Mr. CARSON of Indi-
ana, Ms. HAHN, Ms. KAPTUR, Mr. NADLER, Mr. CONYERS, Mr. THOMP-
SON of Mississippi, Ms. BROWN of Florida, Mr. CUMMINGS, Ms. ESHOO, 
Mr. GONZALEZ, Ms. NORTON, Ms. LEE of California, Ms. DELAURO, Ms. 
WILSON of Florida, Ms. LORETTA SANCHEZ of California, Ms. WOOLSEY, 
Mrs. LOWEY, Mr. TOWNS, Ms. WATERS, Mr. TONKO, Mr. RUSH, Mr. 
ACKERMAN, Mr. HINCHEY, Mr. STARK, Mr. HOLT, Mr. PALLONE, Ms. 
TSONGAS, Mr. BECERRA, and Ms. BASS of California) introduced the fol-
lowing bill; which was referred to the Committee 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, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Overdraft Protection 
Act of 2012’’. 
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) many depository institutions offer a 
range of overdraft options but aggressively en-
courage consumers to consent to the most ex-
pensive option, where a high flat fee is collected 
for every individual overdraft transaction; 
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‘‘(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-
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 practices in connection 
with overdraft coverage fees have deprived con-
sumers of meaningful choices about their ac-
counts and placed significant financial burdens 
on low- and moderate-income consumers. 
‘‘(2) PURPOSE.—It is the purpose of this title 
to protect consumers by limiting abusive overdraft 
coverage fees and practices, and by providing mean-
ingful 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: 
‘‘(ee) 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 
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the 21st Century Act (12 U.S.C. 5001 et seq.), 
other than a travelers check. 
‘‘(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, in a withdrawal by check or other debit from 
a transaction account in which there are insufficient 
or unavailable funds in the account to cover such 
check or debit, the amount of such withdrawal that 
exceeds the available funds in the account. 
‘‘(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-
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sessed in connection with overdraft coverage, or in 
connection with any negative account balance that 
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 2012; 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)).’’. 
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(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 103(ee) of the 
Truth in Lending Act (12 U.S.C. 1602(ee))’’ after ‘‘inclu-
sive of all finance charges’’. 
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 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— 
‘‘(1) any overdraft coverage fees with respect to 
such overdraft coverage; and 
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‘‘(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 transaction account; and 
‘‘(B) the consumer will not be charged a 
fee if such transaction is declined. 
‘‘(c) CONSUMER CONSENT OPT-IN.—A depository 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 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-
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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-
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 depository insti-
tution that offers an overdraft coverage program shall, in 
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 and nonsufficient fund fees charged to the con-
sumer 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 
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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 
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. 
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‘‘(i) OVERDRAFT COVERAGE FEE LIMITS.— 
‘‘(1) NOTICE AND OPPORTUNITY TO CANCEL.— 
Each depository institution shall— 
‘‘(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 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. 
‘‘(3) 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 amount of the 
overdraft. 
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‘‘(B) SAFE HARBOR RULE AUTHORIZED.— 
The Bureau, in consultation with the Board of 
Governors of the Federal Reserve System, 
Comptroller of the Currency, the Board of Di-
rectors of the Federal Deposit Insurance Cor-
poration, and the National Credit Union Ad-
ministration Board, may issue rules to provide 
an amount for any overdraft coverage fee that 
is presumed to be reasonable and proportional 
the amount of the overdraft. 
‘‘(4) 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. 
‘‘(j) 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. 
‘‘(k) 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, 
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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. 
‘‘(l) NONSUFFICIENT FUND FEE LIMITS.—No depos-
itory 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. 
‘‘(m) 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 
(15 U.S.C. 1681a)) when the overdraft amounts and over-
draft coverage fees are repaid under the terms of an over-
draft coverage program. 
‘‘(n) PREPAID CARD STUDY AND RULEMAKING.— 
‘‘(1) STUDY.— 
‘‘(A) IN
GENERAL.—The Bureau shall 
carry out a study on whether consumers are 
being subjected to abusive practices with re-
spect to prepaid card overdraft coverage. 
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‘‘(B) REPORT.—Not later than 1 year 
after the date of the enactment of this section, 
the Bureau shall issue a report to the Congress 
on all findings and determinations made in car-
rying out the study required under subpara-
graph (A). 
‘‘(2) RULEMAKING.—If the Bureau, in carrying 
out the study required under paragraph (1)(A), de-
termines that consumers are being subjected to abu-
sive practices with respect to prepaid card overdraft 
coverage, the Bureau may, to the extent the Bureau 
determines appropriate, apply the provisions of this 
section to prepaid card overdraft coverage to the 
same extent such provisions apply to overdraft cov-
erage offered by depository institutions. 
‘‘(3) DEFINITIONS.—For purpose of this sec-
tion: 
‘‘(A) PREPAID CARD.—The term ‘prepaid 
card’ has the meaning given the term general- 
use prepaid card under section 915(a)(2)(A) of 
the Electronic Fund Transfer Act. 
‘‘(B) PREPAID
CARD
OVERDRAFT
COV-
ERAGE.—The term ‘prepaid card overdraft cov-
erage’ means the payment of a charge posted 
against a prepaid card— 
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‘‘(i) where the prepaid card has insuf-
ficient or unavailable funds with which to 
cover such payment; and 
‘‘(ii) where a fee or other charge is as-
sessed against the consumer in connection 
with such payment. 
‘‘(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.’’. 
(b) TECHNICAL AMENDMENT.—The table of contents 
for chapter II of the Truth in Lending Act is amended 
by inserting after the item relating to section 140A the 
following new item: 
‘‘140B. Overdraft coverage program disclosures and consumer protection.’’. 
SEC. 5. REGULATORY AUTHORITY OF THE BUREAU. 
Not later than 24 months after the date of the enact-
ment of this Act, the Bureau of Consumer Financial Pro-
tection (hereafter in this Act referred to as the ‘‘Bureau’’) 
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. 
SEC. 6. EFFECTIVE DATE. 
(a) IN GENERAL.—This Act and the amendments 
made by this Act shall take effect 1 year after the date 
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of the enactment of this Act, whether or not the rules of 
the Bureau under this Act or such amendments are pre-
scribed in final form. 
(b) PREPAID CARD STUDY TO BEGIN ON ENACT-
MENT.—Notwithstanding 
subsection 
(a), 
section 
140B(n)(1) of the Truth in Lending Act (as added by sec-
tion 4(a)) shall take effect upon enactment of this Act. 
(c) 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. 
(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(ee) of the Truth in Lending Act, as 
added by this Act. 
Æ 
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