Governor Andrew Cuomo signs legislation requiring banks to take action to prevent overdraft fees

New York – Thursday Governor Andrew Cuomo signed legislation that requires banks to prevent overdraft fees

According to the legislation, 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. However, the bank must honor any smaller checks that can be paid with the existing account balance.

According to current law, if a bank receives a check for a larger amount of money than the funds in the account can cover, it will dishonor that check and all subsequent checks, even if there are sufficient funds in the account to pay them.

“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,” Governor Cuomo said in a news release. “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.”