I 
114TH CONGRESS 
2D SESSION 
H. R. 5198 
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 11, 2016 
Mrs. CAROLYN B. MALONEY of New York (for herself, Mr. BLUMENAUER, Ms. 
JUDY CHU of California, Mr. ISRAEL, Mrs. LOWEY, Mr. MCGOVERN, Ms. 
NORTON, Mr. RYAN of Ohio, Ms. SCHAKOWSKY, Mr. SERRANO, Ms. 
SLAUGHTER, Ms. TSONGAS, Mr. SHERMAN, Mr. CAPUANO, Ms. MOORE, 
Mr. ELLISON, and Mr. FOSTER) introduced the following 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, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Overdraft Protection 
Act of 2016’’. 
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SEC. 2. FINDINGS AND PURPOSE. 
(a) FINDINGS.—The Congress finds the following: 
(1) Overdraft coverage is a form of short-term 
credit that depository institutions provide for con-
sumer transaction accounts. Historically, depository 
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 depository institutions offer 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) Most depository institutions collect a high 
flat fee, including for small dollar transactions, each 
time the institution covers an overdraft, in some 
cases impose multiple overdraft coverage fees within 
a single day, and many charge additional fees for 
each day during which the account remains over-
drawn. 
(5) Such abusive practices in connection with 
overdraft coverage fees have deprived consumers of 
meaningful choices about their accounts and placed 
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significant financial burdens on low- and moderate- 
income consumers. 
(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) 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. 
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‘‘(4) 
OVERDRAFT.—The 
term 
‘overdraft’ 
means, in a withdrawal by check or other debit from 
a consumer transaction account in which there are 
insufficient or unavailable funds in the account to 
cover such check or debit, the amount of such with-
drawal that exceeds the available funds in the ac-
count. 
‘‘(5) OVERDRAFT COVERAGE.—The term ‘over-
draft coverage’ means the payment of a check pre-
sented or other debit posted against a consumer 
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 
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 
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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)).’’. 
(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 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 
‘‘(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. 
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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 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 
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 
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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. 
‘‘(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-
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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. 
‘‘(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-
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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, 
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. 
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‘‘(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) 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.’’. 
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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 
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) 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 
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