Bill Text: CA SB1075 | 2023-2024 | Regular Session | Chaptered
Bill Title: Credit unions: overdraft and nonsufficient funds fees.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2024-09-24 - Chaptered by Secretary of State. Chapter 521, Statutes of 2024. [SB1075 Detail]
Download: California-2023-SB1075-Chaptered.html
Senate Bill
No. 1075
CHAPTER 521
An act to add Section 14053 to the Financial Code, relating to credit unions.
[
Approved by
Governor
September 24, 2024.
Filed with
Secretary of State
September 24, 2024.
]
LEGISLATIVE COUNSEL'S DIGEST
SB 1075, Bradford.
Credit unions: overdraft and nonsufficient funds fees.
The California Credit Union Law generally provides for the organization and regulation of credit unions by the Commissioner of Financial Protection and Innovation. Existing law requires a credit union subject to the examination authority of the commissioner to report annually to the commissioner on the amount of revenue earned from overdraft fees and nonsufficient funds fees, as defined and specified.
This bill would require a credit union to provide a member a notice each time the credit union assesses an overdraft fee
or nonsufficient funds fee, as specified. Beginning January 1, 2026, the bill would prohibit a credit union from charging an overdraft fee or a nonsufficient funds fee exceeding $14 or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 14053 is added to the Financial Code, to read:14053.
(a) For purposes of this section, the following definitions apply:(1) “Fee” means a nonsufficient funds fee or an overdraft fee.
(2) “Nonsufficient funds fee” means a fee resulting from the initiation of a transaction that exceeds the member’s available account balance if the
member’s credit union declines to make the payment.
(3) “Overdraft fee” means a fee resulting from the processing of a transaction that exceeds a member’s available account balance.
(b) (1) A credit union shall provide a notice to a member each time the credit union assesses a fee that meets all of the following requirements:
(A) The notice shall be provided to the member using a communication method designated by the member for receiving this type of notice.
(B) The notice shall be provided on the same business day the transaction that resulted in the fee occurred, unless
it is not feasible to provide the notice that day, in which case the notice shall be provided on the next business day.
(C) The notice shall contain all of the following:
(i) The date of the transaction.
(ii) The type of transaction.
(iii) Whether the transaction was declined or processed.
(iv) If applicable, the amount of the overdraft that results from the transaction.
(v) If applicable, the amount necessary to return the account to a positive balance.
(vi) If applicable, the consequences of not returning the account to a positive balance within a certain
timeframe.
(vii) If applicable, the amount of time the member has to return the account to a positive balance to avoid the consequences described in clause (vi).
(2) If the account has more than one accountholder, provision of the notice described in paragraph (1) to any accountholder shall be sufficient.
(c) Beginning January 1, 2026, a credit union shall not charge a fee exceeding fourteen dollars ($14) or the amount set by the
federal Consumer Financial Protection Bureau for the fee, whichever is lower.
