Today's Law As Amended


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SB-1075 Credit unions: overdraft and nonsufficient funds fees.(2023-2024)



As Amends the Law Today


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.