[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4414 Introduced in House (IH)]








109th CONGRESS
  1st Session
                                H. R. 4414

  To amend the Electronic Fund Transfer Act to require notice to the 
 consumer before any fee may be imposed by a financial institution in 
 connection with any transaction for any overdraft protection service 
   provided with respect to such transaction, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 18, 2005

 Mr. Meek of Florida (for himself and Mr. Ryan of Ohio) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
  To amend the Electronic Fund Transfer Act to require notice to the 
 consumer before any fee may be imposed by a financial institution in 
 connection with any transaction for any overdraft protection service 
   provided with respect to such transaction, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Overdraft Fee Notification Act''.

SEC. 2. NOTIFICATION OF OVERDRAFT FEE.

    (a) In General.--Section 905 of the Electronic Fund Transfer Act 
(15 U.S.C. 1693c) is amended by adding at the end the following new 
subsection:
    ``(d) Notification of Overdraft Fee for In-Person, Automated, 
Telephonic, and Internet-Based Transactions.--
            ``(1) In general.--In the case of any financial institution 
        that provides any overdraft protection service to any consumer 
        on a flat, per-transaction basis in connection with a 
        withdrawal from or debit of the consumer's account at the 
        financial institution in a transaction described in paragraph 
        (2) that would result in an overdraft of such consumer account, 
        no fee or charge may be imposed for such overdraft protection 
        service unless the notice required by this subsection has been 
        provided to the consumer, in the manner required under this 
        subsection, before the completion of the transaction that would 
        result in an overdraft.
            ``(2) Scope of application.--Paragraph (1) shall apply to 
        any withdrawal from or debit of a consumer's account at a 
        financial institution in a transaction initiated by the 
        consumer as an electronic fund transfer or in person at a 
        branch of the financial institution staffed by employees of the 
        financial institution.
            ``(3) Automated teller machine transactions.--In the case 
        of any electronic fund transfer initiated by a consumer at any 
        automated teller machine, whether or not such machine is 
        maintained by the financial institution that holds the account 
        of the consumer initiating the transaction, the following 
        disclosure rules shall apply:
                    ``(A) Balance requests.--
                            ``(i) In general.--In the case of a request 
                        by the consumer at the automated teller machine 
                        for balance information, the display provided 
                        on the machine shall provide such information 
                        in a manner that differentiates between--
                                    ``(I) the funds available in the 
                                account that are attributable to 
                                deposits by or on behalf of the 
                                consumer; and
                                    ``(II) funds available to the 
                                customer from the institution in 
                                connection with an overdraft protection 
                                service.
                            ``(ii) Overdraft protection service fee 
                        amount.--On the same screen of the automated 
                        teller machine referred to in clause (i), the 
                        display shall provide information on any fee 
                        that would be imposed for the provision of any 
                        overdraft protection service provided in 
                        connection with the transaction.
                    ``(B) Withdrawal or transfer.--In the case of a 
                request by the consumer at the automated teller machine 
                to initiate an electronic fund transfer that can be 
                completed only if an overdraft protection service is 
                provided to the consumer, the display provided on the 
                machine shall provide the following notice, with the 
                blanks filled in appropriately, and the option for the 
                consumer to accept or decline the service:
                `This request exceeds your funds available and will 
                result in an overdraft of $__ and the imposition of a 
                fee from your financial institution of $__. To accept 
                this fee and continue with your transaction, press 
                ``ACCEPT''. To terminate this transaction, press 
                ``DECLINE''.'.
            ``(4) Automated point of sale transaction.--In the case of 
        any electronic fund transfer initiated by a consumer at any 
        automated point-of-sale machine that can be completed only if 
        an overdraft protection service is provided to the consumer for 
        a fee, the following disclosure rules shall apply to the extent 
        a screen operated in conjunction with the machine is available 
        to the consumer for effectuating the transaction:
                    ``(A) Notice of overdraft.--The display provided on 
                the machine shall provide the following notice and the 
                option for the consumer to continue or discontinue the 
                transaction:
                `Transaction will result in an overdraft of $__. To 
                continue with your transaction, press ``CONTINUE''. To 
                terminate this transaction, press ``NO''.'.
                    ``(B) Notice of fee.--If the consumer referred to 
                in subparagraph (A) continues with the transaction, the 
                display provided on the machine shall provide the 
                following notice and the option for the consumer to 
                accept or decline the fee:
                `A fee of $__ will be imposed for the overdraft. To 
                accept this fee and continue with your transaction, 
                press ``ACCEPT''. To terminate this transaction, press 
                ``DECLINE''.'.
            ``(5) In-person and telephonic transactions.--In the case 
        of any fund transfer or withdrawal initiated by a consumer in 
        person at a branch of the financial institution staffed by 
        employees of the financial institution or verbally over the 
        telephone, the following disclosure requirements shall apply:
                    ``(A) Balance requests.--If, in the course of the 
                transaction, the amount of the balance in the 
                consumer's account is mentioned or requested, the 
                customer shall be made aware verbally of any 
                distinction between--
                            ``(i) the funds available in the account 
                        that are attributable to deposits by or on 
                        behalf of the consumer; and
                            ``(ii) funds available to the customer from 
                        the institution in connection with an overdraft 
                        protection service.
                    ``(B) Overdraft protection service fee amount.--If 
                the consummation of the withdrawal or fund transfer 
                transaction would result in the imposition of an 
                overdraft protection service fee on the account of the 
                consumer, the consumer shall promptly be informed of 
                such fact and the amount of the fee before the 
                transaction is final.
            ``(6) Internet and other electronic terminal 
        transactions.--In the case of any electronic fund transfer 
        initiated by the consumer at any electronic terminal or 
        computer, other than an automated teller machine or automated 
        point-of-sale machine meeting the requirements of paragraph (3) 
        or (4), that can be completed only if an overdraft protection 
        service is provided to the consumer for a fee, the display 
        provided on the terminal or computer shall provide the 
        following notice and the option for the consumer to accept or 
        decline the fee:
        `This request exceeds your funds available and will result in 
        an overdraft of $__ and the imposition of a fee from your 
        financial institution of $__. To accept this fee and continue 
        with your transaction, press ``ACCEPT''. To terminate this 
        transaction, press ``DECLINE''.'.
            ``(7) Definitions.--For purposes of this subsection and 
        section 906(c)(5), the following definitions shall apply:
                    ``(A) Annual percentage rate.--The term `annual 
                percentage rate' means the rate of interest determined 
                in the manner provided in section 108 and regulations 
                prescribed by the Board under such section.
                    ``(B) Overdraft protection service.--The term 
                `overdraft protection service' means any service 
                provided by a financial institution holding the account 
                of any consumer pursuant to which any debit against the 
                account is paid by the financial institution even 
                though there are insufficient funds in the account to 
                cover the amount of the debit, however such payment is 
                accomplished, including through the use of overdraft 
                lines of credit, linked accounts, or any overdraft 
                protection program for which the financial institution 
                has not complied with the disclosure requirements under 
                the Truth in Lending Act and regulations prescribed 
                under such Act.''.
    (b) Information Required in Periodic Statement.--Section 906(c) of 
the Electronic Fund Transfer Act (15 U.S.C. 1693d(c)) is amended--
            (1) by striking ``and'' at the end of paragraph (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) with respect to each case in which the financial 
        institution was required to provide notice to a customer under 
        any paragraph of section 905(d) of the imposition of an 
        overdraft fee and the amount of the fee during the period 
        covered by the periodic statement, a written statement of the 
        annual percentage rate which the fee represents with respect to 
        the amount of the overdraft in type no smaller than other 
        required disclosures under this subsection, but not less than 
        8-point type, and in the following form:
        `Overdraft Fee Annual Percentage Rate Notice: The overdraft fee 
        resulting from your transaction dated ___ is equal to an Annual 
        Percentage Rate of __% on your overdraft balance of $___.'.''.
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