NY A00941

Establishes a new Consumer Overdraft Protection Act limiting overdraft protection fees to a maximum of $100 per year on consumer transaction accounts, with institutions required to implement an automatic bounce system once this limit is exceeded.

Requires financial institutions to obtain specific written consumer consent before charging overdraft fees and mandates clear disclosure of fee amounts, applicable transaction categories, repayment timeframes, and circumstances when overdrafts will not be covered.

Prohibits institutions from representing accounts as "free" or "no cost" if they include overdraft protection services with fees, and bans misleading claims that the institution will honor all checks when it retains discretionary authority to decline payment.

Allows institutions to charge a maximum $1 monthly fee for maintaining an automatic bounce system, which must be separately disclosed in periodic account statements and included in annual percentage rate calculations.

Prohibits institutions from misrepresenting overdraft coverage by claiming they will extend credit to cover all overdrafts when they reserve the right to deny payment on a discretionary basis.