New York consumers could be better protected from overdraft fees through proposed regulations from the New York State Department of Financial Services.
Gov. Kathy Hochul announced regulations Wednesday aiming to eliminate the most exploitative and deceptive banking fees, cap overdraft fees, strengthen customer communications and establish a stricter transaction processing requirement as part of her 2025 State of the State address.
“With hidden fees and unfair practices, it has become increasingly more difficult for hard-working New Yorkers to keep up,” Hochul said. “It is time that we hold banks accountable and lighten the burden of high overdraft fees for minor transactions to keep New Yorkers’ hard-earned money in their pockets.”
Here’s what to know.
How NY consumers would benefit from the proposed protections
Gov. Kathy Hochul on Jan. 6 announced a proposal to raise the state’s child tax credit to as much as $1,000 as part of the agenda she will lay out in her 2025 State of the State speech.
If enacted, the proposed regulations would keep state-chartered banks from doing the following:
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Charging overdraft fees on overdrafts of less than $20
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Charging overdraft fees that exceed the overdrawn amount
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Charging more than three overdraft or non-sufficient funds fees per consumer account per day
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Charging non-sufficient funds feeds for instantaneously declined electronic transactions
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Charging multiple non-sufficient funds or overdraft fees for the same transaction, including when a merchant resubmits a declined transaction
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Charging a “sustained,” “continuous” or “daily” fee for each day an overdraft balance is not repaid
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Charging double fees to cover an overdraft, such as one fee for automatically transferring funds from another account and a second fee for the overdraft itself
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Processing electronic debit transactions in a manner intended to maximize the number of overdraft and non-sufficient funds fees
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Charging an overdraft fee for an electronic transaction when the consumer’s account indicates sufficient funds at the time the transaction was initiated
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Other proposed consumer protections in Hochul’s 2025 State of the State
In Hochul’s 2025 State of the State address earlier this month, the governor also announced potential requirements for retail sellers, such as offering a minimum 30-day return window for products, and businesses, which would need to let their online shoppers know when the prices are set based on personal data. Other proposed protections include:
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Simple, transparent and fair cancellation processes that make it just as easy to cancel a subscription as it is to sign up for it
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Licensing and supervision framework for Buy Now Pay Later providers
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Energy Service Companies would be subject to the same requirements as utility companies
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Banks and other institutions would receive more authority to pause certain suspicious transactions and would be required to report suspicious exploitation and fraud to law enforcement and Adult Protective Services
Emily Barnes reports on consumer-related issues for the USA TODAY Network’s New York Connect Team, focusing on scam and recall-related topics. Follow her on Twitter and Instagram @byemilybarnes. Get in touch at ebarnes@gannett.com.
This article originally appeared on Rochester Democrat and Chronicle: Proposed regulations aim to protect NY consumers from overdraft fees