Starting Jan. 1, banks chartered in New York must abide by a new law that’s meant to curb overdraft fees.
Outgoing Democratic Gov. Andrew Cuomo on Thursday signed a bill that requires banks offering consumer checking accounts to pay checks in the order they are received, or from smallest to largest dollar amount for each business day’s transactions.
The overdraft law signed Thursday by New York Gov. Andrew Cuomo applies to state-chartered banks that offer consumer checking accounts. It takes effect Jan. 1.
Banks may still decline to pay checks if the amount of money is greater than the balance in the account, but they must pay any smaller checks that can be paid with the existing funds in the account. Until now, banks have been able to decline both the initial check and all subsequent checks, even if there has been enough money in the account to pay for the smaller checks.