New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter I - GENERAL REGULATIONS OF THE SUPERINTENDENT › Part 6 - Additional Authority Of Banks, Trust Companies, Savings Banks And Savings And Loan Associations Pursuant To Banking Law, Sections 14-g And 14-h › Section 6.8 - Overdraft protection charges

Current through Register Vol. 46, No. 28, July 10, 2024
(a) The Banking Board hereby finds that the
				promulgation of this section is consistent with the policy of the State of New
				York as declared in section 10 of the New York Banking Law and thereby protects
				the public interest, including the interests of depositors, creditors,
				shareholders, stockholders and consumers and is necessary to achieve or
				maintain parity between banks and trust companies and national banks, and
				between savings banks and savings and loan associations and Federal savings
				associations, with respect to rights, powers, privileges, benefits, activities,
				loans, investments or transactions.
(b) The Banking Board hereby finds that title
				 12, United States Code, section 24  (seventh) permits national banks to lend
				money. Title  12, United States Code, section 1464  permits Federal savings
				associations to accept deposits.
(c) The Banking Board hereby finds that title
				 12, Code of Federal Regulations, section 7.4002  provides that national banks
				may impose charges and fees on their customers, and  title 12, Code of Federal
				Regulations, section 557.12(f)  allows Federal savings associations to impose
				charges and fees regardless of any State laws. The Office of the Comptroller of
				the Currency and the Office of Thrift Supervision, in interpreting these
				sections, permit national banks and Federal savings associations, respectively,
				to impose greater daily charges in connection with overdraft protection
				programs than is otherwise allowed under New York Banking Law for banks and
				trust companies, savings banks and savings and loan associations. (See Joint
				Guidance on Overdraft Protection Programs, 70 Federal Register 9127 [February
				24, 2005], applicable to banks and trust companies and Guidance on Overdraft
				Protection Programs, 70 Federal Register 8428 [February 18, 2005], applicable
				to savings banks and savings and loan associations.)
(d) Notwithstanding any other provision of
				law or regulation, State-chartered banks and trust companies, and savings banks
				and savings and loan associations may impose charges, in addition to the charge
				provided for in section
				32.1(a) 
				of this Title, for paying or accepting checks or other written orders drawn on,
				or effectuating electronic transactions from, accounts containing insufficient
				funds in cases in which the drawer of the check or other written order, or the
				account holder seeking to effectuate the electronic transaction, does not have
				a written agreement for an overdraft line of credit pursuant to section 108 (5), 235 (8-b) or
				380 (2)  of the Banking Law
				to the same extent, and subject to the same conditions, as national banks and
				Federal savings associations, respectively.
(e) Commencing no later than 90 days after
				the effective date of this subdivision, State-chartered banks and trust
				companies, savings banks, and savings and loan associations shall provide a
				separate clear and conspicuous notice to a customer at the time he or she opens
				an account or to a current accountholder at least once if such account will be
				subject to charges for covering overdrafts as described in subdivision (d) of
				this section. Such notice shall provide clear disclosure and explanation of the
				parameters, costs and limitations of overdraft protection, including the
				charges which may be incurred by the customer and how such charges would be
				calculated.