SACRAMENTO, Calif.–Among the most significant laws going into effect in 2023 that will have a bearing on credit unions is SB 1415 in California, which requires CUs and banks subject to the authority of the Department of Financial Protection (DPFI) to disclose the revenue they earn from overdraft and nonsufficient funds fees.
The law also applies to financial institutions that are headquartered out of state but have an office in the state.
Credit unions and banks subject to the law have until March 1 to file the information, after which the DPFI is required to publish a report on its website by March 31 for the 2022 calendar year.
The legislation, passed out of the Assembly Committee on Banking and Finance, defines “nonsufficient funds fees” as those resulting from the initiation of a transaction that exceeds the customer’s/members account balance if the customer’s/member’s bank or credit union declines to make the payment.
The law defines “overdraft fees” as those resulting from the processing of a debit transaction that exceeds a customer’s/member’s account balance.
‘Disproportionate’ Burden
Language in the bill at the time it was proposed said “overdraft fees are disproportionately borne by consumers who are least able to afford these oppressive charges: workers with volatile incomes, parents of young children, and Millennials and Gen Z adults. These fees are also highly concentrated, with less than 9% of consumer accounts paying 10 or more overdrafts per year, accounting for nearly 80% of all overdraft revenue generated by financial institutions.
“California policymakers and the public deserve more transparency about the overdraft practices at financial institutions under the state’s oversight,” the language continues. “This bill will provide better formation about overdraft practices that will inform future policy efforts to reduce the burden of high fees on vulnerable consumers.”
Just in Time for the New Year, CUToday’s Free Morning Headline Email is Now Double-Free!
Don’t forget to check your Spam/Junk email folder if you haven’t been receiving your free, popular and daily CUToday.info news headlines.
And if you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time.
CUToday.info has received very positive response from readers following the move to an improved provider of the daily headlines, but many also noted they did need to go to their Spam/Junk folder and mark it as safe.
The new email solution has not only improved every reader’s delivery experience, but it also features a fresh, new format that is easy to read, especially on mobile devices.
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com