ALBANY (WENY) – New York Gov. Andrew Cuomo is taking action to prevent banks from charging overdraft fees during his final days in office.
The governor signed legislation this week requiring banks that maintain checking accounts to pay checks in the order they are received. If a bank receives a check for a greater amount of money than the balance in the account, it may decline to pay the check.
A banking institution, however, must honor any smaller checks that can be paid.
“The COVID pandemic had a devastating effect on our economy and as a result, many New Yorkers still struggle to pay their bills, and the arbitrary overdraft fees that banks have continued to issue only add insult to injury,” Cuomo said in a statement. “This legislation will require banks to take several actions that reduce the opportunities for charging overdraft fees and keep more money in New Yorkers’ pockets. We continue to face the economic impacts of the COVID-19 pandemic and this commonsense bill will help many of the state’s residents who need it most.”
Current law allows a bank to dishonor a check if it is larger than the funds in the account. All subsequent checks would also be dishonored, even if there are sufficient funds in the account. The new legislation will honor subsequent checks henceforth.
Leave a Reply