What's happening
This bill requires banks to pay consumer checks in the order received or from smallest to largest, and to disclose their check processing order to customers.
Why it matters
Limits banks’ ability to reorder checks to maximize overdraft fees. , protecting consumers from having multiple smaller checks bounce unnecessarily if a larger check is presented first.
Gives consumers more transparency and predictability. about when their checks will clear, aiding in budgeting and reducing the risk of unexpected account overdrafts.
Empowers consumers with written disclosure requirements. , ensuring that account holders know the bank’s check-processing policy both when opening accounts and if any changes occur.
Targets personal and household accounts specifically. , focusing these protections on everyday consumers rather than business or commercial accounts.
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Who cares
Headline styles
Banks Must Pay Checks Sequentially
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Print number 2797a
- Amend and recommit to banks
- Referred to banks
- Referred to banks
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Banks Must Pay Checks Orderly
Assembly Floor Calendar · Sponsor Kenneth Zebrowski
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2797--A
2017-2018 Regular Sessions
IN SENATE
January 17, 2017
Introduced by Sen. BRESLIN -- read twice and ordered printed, and when printed to be committed to the Committee on Banks -- recommitted to the Committee on Banks in accordance with Senate Rule 6, sec. 8 -committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the banking law, in relation to the order in which a payor bank shall pay checks
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The banking law is amended by adding a new section 9-x to read as follows:
§ 9-x. Banking institutions to pay checks drawn therein in order of presentation. 1. Notwithstanding any law, rule or regulation to the contrary, every banking institution that provides consumer checking accounts shall either pay checks in the order wherein they are received or pay checks from smallest to largest dollar amount for each business day's transactions.
2. If a check is dishonored for insufficient funds and thereafter smaller checks which could be paid are received, the smaller checks shall be honored within amounts on deposit in the subject account.
3. The banking institution shall disclose to consumers in writing the order in which checks are drawn. The written disclosure shall be provided to the consumer at the time the account is opened and prior to any change in such policy. The superintendent shall promulgate rules and regulations necessary for the implementation of this section.
4. As used in this section, "consumer checking accounts" means accounts established by natural persons primarily for personal, family or household purposes.
§ 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07483-03-8
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the banking law, in relation to the order in which a payor bank shall pay checks
Purpose or general idea of bill
Provides that every banking institution maintaining checking accounts for customers shall pay checks in the order received within account balances.
Summary of specific provisions
A new section 9-X is added to the banking law to require that every banking institution maintaining checking accounts for customers shall pay checks in the order received; provided, however, that if a check is dishonored for insufficient funds and thereafter smaller checks which could be paid are received, the smaller checks shall be honored within the amounts on deposit in the subject account.
Justification
Under current law if a check is presented to a banking institution for a customer maintaining a checking account in that banking institution which exceeds the funds available in the account the check is dishonored and all subsequent checks received by that bank. This occurs, even if there is sufficient funds in the account to honor one or more of the subsequent checks. This would require the banks to honor subsequent checks if the customer's account has sufficient funds to cover those checks.
Prior legislative history
2015-16: S.794A/A.4981A Print number 794A/ Advanced to third reading cal. 540 2013-14: S.1156 Remained in the Senate Committee on Banks 2011-12: S.1195 Remained in the Senate Committee on Banks 2009-10: S.8146/A.6685 Remained in the Senate Committee on Banks/ Passed the Assembly
Fiscal implications
None.
Effective date
This act shall take effect on the first of January next succeeding the date on which it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.