[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4414 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 4414
To amend the Electronic Fund Transfer Act to require notice to the
consumer before any fee may be imposed by a financial institution in
connection with any transaction for any overdraft protection service
provided with respect to such transaction, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 18, 2005
Mr. Meek of Florida (for himself and Mr. Ryan of Ohio) introduced the
following bill; which was referred to the Committee on Financial
Services
_______________________________________________________________________
A BILL
To amend the Electronic Fund Transfer Act to require notice to the
consumer before any fee may be imposed by a financial institution in
connection with any transaction for any overdraft protection service
provided with respect to such transaction, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Overdraft Fee Notification Act''.
SEC. 2. NOTIFICATION OF OVERDRAFT FEE.
(a) In General.--Section 905 of the Electronic Fund Transfer Act
(15 U.S.C. 1693c) is amended by adding at the end the following new
subsection:
``(d) Notification of Overdraft Fee for In-Person, Automated,
Telephonic, and Internet-Based Transactions.--
``(1) In general.--In the case of any financial institution
that provides any overdraft protection service to any consumer
on a flat, per-transaction basis in connection with a
withdrawal from or debit of the consumer's account at the
financial institution in a transaction described in paragraph
(2) that would result in an overdraft of such consumer account,
no fee or charge may be imposed for such overdraft protection
service unless the notice required by this subsection has been
provided to the consumer, in the manner required under this
subsection, before the completion of the transaction that would
result in an overdraft.
``(2) Scope of application.--Paragraph (1) shall apply to
any withdrawal from or debit of a consumer's account at a
financial institution in a transaction initiated by the
consumer as an electronic fund transfer or in person at a
branch of the financial institution staffed by employees of the
financial institution.
``(3) Automated teller machine transactions.--In the case
of any electronic fund transfer initiated by a consumer at any
automated teller machine, whether or not such machine is
maintained by the financial institution that holds the account
of the consumer initiating the transaction, the following
disclosure rules shall apply:
``(A) Balance requests.--
``(i) In general.--In the case of a request
by the consumer at the automated teller machine
for balance information, the display provided
on the machine shall provide such information
in a manner that differentiates between--
``(I) the funds available in the
account that are attributable to
deposits by or on behalf of the
consumer; and
``(II) funds available to the
customer from the institution in
connection with an overdraft protection
service.
``(ii) Overdraft protection service fee
amount.--On the same screen of the automated
teller machine referred to in clause (i), the
display shall provide information on any fee
that would be imposed for the provision of any
overdraft protection service provided in
connection with the transaction.
``(B) Withdrawal or transfer.--In the case of a
request by the consumer at the automated teller machine
to initiate an electronic fund transfer that can be
completed only if an overdraft protection service is
provided to the consumer, the display provided on the
machine shall provide the following notice, with the
blanks filled in appropriately, and the option for the
consumer to accept or decline the service:
`This request exceeds your funds available and will
result in an overdraft of $__ and the imposition of a
fee from your financial institution of $__. To accept
this fee and continue with your transaction, press
``ACCEPT''. To terminate this transaction, press
``DECLINE''.'.
``(4) Automated point of sale transaction.--In the case of
any electronic fund transfer initiated by a consumer at any
automated point-of-sale machine that can be completed only if
an overdraft protection service is provided to the consumer for
a fee, the following disclosure rules shall apply to the extent
a screen operated in conjunction with the machine is available
to the consumer for effectuating the transaction:
``(A) Notice of overdraft.--The display provided on
the machine shall provide the following notice and the
option for the consumer to continue or discontinue the
transaction:
`Transaction will result in an overdraft of $__. To
continue with your transaction, press ``CONTINUE''. To
terminate this transaction, press ``NO''.'.
``(B) Notice of fee.--If the consumer referred to
in subparagraph (A) continues with the transaction, the
display provided on the machine shall provide the
following notice and the option for the consumer to
accept or decline the fee:
`A fee of $__ will be imposed for the overdraft. To
accept this fee and continue with your transaction,
press ``ACCEPT''. To terminate this transaction, press
``DECLINE''.'.
``(5) In-person and telephonic transactions.--In the case
of any fund transfer or withdrawal initiated by a consumer in
person at a branch of the financial institution staffed by
employees of the financial institution or verbally over the
telephone, the following disclosure requirements shall apply:
``(A) Balance requests.--If, in the course of the
transaction, the amount of the balance in the
consumer's account is mentioned or requested, the
customer shall be made aware verbally of any
distinction between--
``(i) the funds available in the account
that are attributable to deposits by or on
behalf of the consumer; and
``(ii) funds available to the customer from
the institution in connection with an overdraft
protection service.
``(B) Overdraft protection service fee amount.--If
the consummation of the withdrawal or fund transfer
transaction would result in the imposition of an
overdraft protection service fee on the account of the
consumer, the consumer shall promptly be informed of
such fact and the amount of the fee before the
transaction is final.
``(6) Internet and other electronic terminal
transactions.--In the case of any electronic fund transfer
initiated by the consumer at any electronic terminal or
computer, other than an automated teller machine or automated
point-of-sale machine meeting the requirements of paragraph (3)
or (4), that can be completed only if an overdraft protection
service is provided to the consumer for a fee, the display
provided on the terminal or computer shall provide the
following notice and the option for the consumer to accept or
decline the fee:
`This request exceeds your funds available and will result in
an overdraft of $__ and the imposition of a fee from your
financial institution of $__. To accept this fee and continue
with your transaction, press ``ACCEPT''. To terminate this
transaction, press ``DECLINE''.'.
``(7) Definitions.--For purposes of this subsection and
section 906(c)(5), the following definitions shall apply:
``(A) Annual percentage rate.--The term `annual
percentage rate' means the rate of interest determined
in the manner provided in section 108 and regulations
prescribed by the Board under such section.
``(B) Overdraft protection service.--The term
`overdraft protection service' means any service
provided by a financial institution holding the account
of any consumer pursuant to which any debit against the
account is paid by the financial institution even
though there are insufficient funds in the account to
cover the amount of the debit, however such payment is
accomplished, including through the use of overdraft
lines of credit, linked accounts, or any overdraft
protection program for which the financial institution
has not complied with the disclosure requirements under
the Truth in Lending Act and regulations prescribed
under such Act.''.
(b) Information Required in Periodic Statement.--Section 906(c) of
the Electronic Fund Transfer Act (15 U.S.C. 1693d(c)) is amended--
(1) by striking ``and'' at the end of paragraph (3);
(2) by striking the period at the end of paragraph (4) and
inserting ``; and''; and
(3) by inserting after paragraph (4) the following new
paragraph:
``(5) with respect to each case in which the financial
institution was required to provide notice to a customer under
any paragraph of section 905(d) of the imposition of an
overdraft fee and the amount of the fee during the period
covered by the periodic statement, a written statement of the
annual percentage rate which the fee represents with respect to
the amount of the overdraft in type no smaller than other
required disclosures under this subsection, but not less than
8-point type, and in the following form:
`Overdraft Fee Annual Percentage Rate Notice: The overdraft fee
resulting from your transaction dated ___ is equal to an Annual
Percentage Rate of __% on your overdraft balance of $___.'.''.
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