109 HR 4415 IH: Consumer Checking Fairness Act U.S. House of Representatives 2005-11-18 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 109th CONGRESS 1st Session H. R. 4415 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 establish a fair order of posting checks and deposits to prevent unjust enrichment of financial institutions from fees that accrue only by virtue of the order used by the institution for posting checks and deposits, and for other purposes.

1.

Short title

This Act may be cited as the Consumer Checking Fairness Act.

2.

Fair order for posting checks

(a)

Order of checks posted

Section 607 of the Expedited Funds Availability Act (12 U.S.C. 4006) is amended by adding at the end the following new subsection: (f)

Numerical order of posting checks

(1)

In general

Subject to paragraph (2), in the process of posting checks presented for payment against a checking account used primarily for personal, family, or household purposes after the close of any business day, the checks shall be posted by a depository institution against the account in the numerical order of the checks, beginning with the lowest number. (2)

Notice and customer consent for different posting order

A depository institution may alter the order required under paragraph (1) for posting checks against a checking account used primarily for personal, family, or household purposes only if— (A)specific notice of the alternate posting order is given by the depository institution to the prospective accountholder verbally and in writing before the account is opened (using a document that is separate from the account application and any other document provided to the prospective accountholder in the process of opening the account) which fully describes the posting process and explains in clear and easy-to-understand language the possible consequences to the accountholder of the alternate posting order; and (B)the depository institution obtains from the accountholder, and retains in its records, a written acknowledgement of the receipt by the accountholder of the notice required under subparagraph (A) and the written consent of the accountholder for the use of the alternate posting order.. (b)

Credits required to be posted before debits

Section 607 of the Expedited Funds Availability Act (12 U.S.C. 4006) is amended by inserting after subsection (f) (as added by subsection (a) of this section) the following new subsection: (g)

Order of posting debits and credits

In the process of posting credits and debits against a checking account used primarily for personal, family, or household purposes after the close of any business day, all deposits shall be credited by a depository institution to the account before debiting any check drawn on the account and presented for payment.. (c)

Regulations

The Board of Governors of the Federal Reserve System shall— (1)prescribe such regulations as may be necessary to implement the amendments made by subsection (a) and (b); and (2)publish such regulations in final form before the end of the 180-day period beginning on the date of the enactment of this Act.