PA House Commerce Committee Passes Overdraft Legislation
Today the PA House Commerce Committee passed legislation 14-12 that would place additional restrictions on overdraft programs. House Bill 1553, sponsored by Rep. Ben Sanchez (D-Montgomery), now heads to the House floor and would require state-chartered credit unions and banks to notify customers each time an overdraft fee is charged. The notice must be delivered using the customer’s preferred communication method and provided on the same business day the transaction occurs—or, if not feasible, on the next business day.
The notice must include:
- The date and type of transaction
- Whether the transaction was declined or processed
- The amount of the overdraft
- The amount required to return the account to a positive balance
- The consequences of not restoring a positive balance
- The timeframe for the customer to act to avoid those consequences
The bill also limits the fees financial institutions can charge. State-chartered banks and credit unions may not charge more than $15 or the actual cost of processing the transaction—whichever is lower. Additionally, they may not impose more than three non-sufficient funds (NSF) fees per customer per calendar day, and they cannot charge an NSF fee for attempted but declined transactions.
Institutions with publicly accessible websites would also be required to post a list of all fees charged.
CrossState partnered with the PA Bankers Association and the PA Association of Community Bankers on this issue and circulated a joint policy position paper ahead of today’s hearing. CrossState will continue to work closely with the banker trades to oppose HB 1553 and ensure lawmakers understand the negative impacts this bill would have on consumers and state chartered financial institutions across the state.