[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3566 Introduced in Senate (IS)]

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116th CONGRESS
  2d Session
                                S. 3566

 To prohibit depository institutions from assessing overdraft and non-
  sufficient fund fees during the novel coronavirus crisis and other 
                   disasters, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 22, 2020

 Mr. Booker (for himself and Mr. Brown) introduced the following bill; 
which was read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To prohibit depository institutions from assessing overdraft and non-
  sufficient fund fees during the novel coronavirus crisis and other 
                   disasters, 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 ``Stop Overdraft Profiteering during 
COVID-19 Emergency Act of 2020''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) Overdraft coverage is a form of short-term credit that 
        depository institutions market for consumer transaction 
        accounts. Historically, depository institutions covered 
        overdrafts for a fee on an ad hoc basis.
            (2) With the growth in specially designed software 
        programs, and in consumer use of debit cards, overdraft 
        coverage for a fee has become more prevalent.
            (3) Many depository institutions market a range of 
        overdraft options but aggressively encourage consumers to 
        consent to the most expensive option, where a high flat fee is 
        collected for each individual overdraft transaction.
            (4) Many depository institutions--
                    (A) collect a high flat fee, including for small 
                dollar transactions, each time the institution covers 
                an overdraft, impose multiple overdraft coverage fees 
                within a single day, and charge additional fees for 
                each day during which the account remains overdrawn; 
                and
                    (B) charge unreasonable nonsufficient fees.
            (5) Such abusive practices in connection with overdraft 
        coverage fees and nonsufficient fees have deprived consumers of 
        meaningful options and placed significant financial burdens on 
        low- and moderate-income consumers.
            (6) During the public health and financial crisis caused by 
        the novel coronavirus, consumers need relief from such abusive 
        practices more than ever before.
    (b) Purpose.--It is the purpose of this Act to protect consumers by 
eliminating abusive overdraft coverage fees, nonsufficient fund fees, 
and practices relating to the assessment of those fees during covered 
periods.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Check.--The term ``check''--
                    (A) has the meaning given the term in section 3(6) 
                of the Check Clearing for the 21st Century Act (12 
                U.S.C. 5002(6)); and
                    (B) does not include a traveler's check.
            (2) Checking account penalty fee.--The term ``checking 
        account penalty fee'' means a nonsufficient fund fee or an 
        overdraft coverage fee.
            (3) Consumer.--The term ``consumer'' has the meaning given 
        the term in section 103(i) of the Truth in Lending Act (15 
        U.S.C. 1602(i)).
            (4) Consumer reporting agency.--The term ``consumer 
        reporting agency'' has the meaning given the term in section 
        603 of the Fair Credit Reporting Act (15 U.S.C. 1681a).
            (5) Covered period.--The term ``covered period'' means--
                    (A) the period that begins 1 day after the date on 
                which a major disaster is declared by the President 
                under section 401 of the Robert T. Stafford Disaster 
                Relief and Emergency Assistance Act (42 U.S.C. 5170), 
                where assistance is authorized under section 408 of 
                that Act (42 U.S.C. 5174), and ending 120 days after 
                the end of the incident period for that disaster; or
                    (B) the period that begins 1 day after the date on 
                which the President determines an emergency exists 
                under section 501(b) of the Robert T. Stafford Disaster 
                Relief and Emergency Assistance Act (42 U.S.C. 5191(b)) 
                and simultaneously covers all States for a single 
                incident, event, or emergency and ending 120 days after 
                the end of the incident period for that emergency.
            (6) Depository institution.--The term ``depository 
        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)).
            (7) Nonsufficient fund fee.--The term ``nonsufficient fund 
        fee'' means a fee or charge assessed in connection with an 
        overdraft for which a depository institution declines payment.
            (8) 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 
        withdrawal that exceeds the available funds in the account.
            (9) Overdraft coverage.--The term ``overdraft coverage'' 
        means the payment of a check presented 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 debit.
            (10) Overdraft coverage fee.--The term ``overdraft coverage 
        fee'' means any fee or charge assessed in connection with 
        overdraft coverage, or in connection with any negative account 
        balance that results from overdraft coverage, excluding--
                    (A) a periodic rate in connection with an extension 
                of credit through an overdraft line of credit program; 
                or
                    (B) a fee or charge imposed in connection with any 
                transfer from an account linked to another transaction 
                account.
            (11) Overdraft coverage program.--The term ``overdraft 
        coverage program'' means a service under which a depository 
        institution assesses an overdraft coverage fee for overdraft 
        coverage.
            (12) Transaction account.--The term ``transaction account'' 
        has the meaning given the term in section 19(b)(1)(C) of the 
        Federal Reserve Act (12 U.S.C. 461(b)(1)(C)).

SEC. 4. CHECKING ACCOUNT PENALTY FEES.

    (a) Prohibition.--
            (1) In general.--During a covered period, no depository 
        institution may assess a checking account penalty fee for any 
        transaction, including a transaction at an automated teller 
        machine, a 1-time debit card transaction, a transaction that 
        involves the use of a check, or an automatic recurring payment.
            (2) Correction.--If a depository institution assesses a 
        checking account penalty fee during a covered period in 
        violation of paragraph (1), the depository institution shall be 
        considered to be in compliance with that paragraph if the 
        depository institution promptly reverses that assessment.
    (b) Reports to Consumer Reporting Agencies.--During a covered 
period, no depository institution may report negative information 
regarding the use of overdraft coverage by a consumer to any consumer 
reporting agency.
    (c) Rule of Construction.--Nothing in this section may be construed 
as prohibiting a depository institution, during a covered period, from 
retaining the discretion to pay, without assessing a checking account 
penalty fee, an overdraft incurred by a consumer.
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