NY A06844

Prohibits financial institutions from imposing overdraft protection fees on consumer transaction accounts unless the consumer provides specific written consent and the fees are disclosed in a clear, written agreement with the consumer.

Caps overdraft fees at $100 per year total, including all additional charges and fees, and requires institutions to establish an automatic bounce system once this limit is reached.

Allows institutions to charge a $1 monthly maintenance fee for the automatic bounce system, which must be separately disclosed to consumers.

Restricts advertising of overdraft protection programs, prohibiting institutions from describing accounts as "free" or "no cost" if overdraft fees apply, from encouraging use for short-term credit needs, or from guaranteeing all checks will be honored if the institution retains discretion to decline.

Exempts from these restrictions overdraft fees that occur on an incidental basis (no more than three per calendar year), fees related to overdraft lines of credit, and fees connected to programs where overdrafts are covered by transfers from other accounts.