On April 15, 2020, Senators Corey Booker (D-NJ) and Sherrod Brown (D-OH) sent letters to numerous leading banks urging them not to charge customers overdraft and non-sufficient fund (NSF) fees during the COVID-19 pandemic.  According to the letters, “banks should be ensuring that consumers will not be faced with any overdraft charges that compounds their already fragile financial state, and provide them some relief as they manage ongoing expenses, including rent and mortgage payments, utility bills, and other essentials.”  Senators Booker and Brown did acknowledge in the letters, however, that “[s]everal banks have announced that they will temporarily waive or refund overdraft fees for their customers.”

The request by Senators Booker and Brown in their April 15, 2020 letters to the banks follows their introduction of Senate Bill 3566 on March 22, 2020.  This bill would mandate that, “[d]uring a covered period, no depository institution may assess a checking account penalty fee for any transaction, including a transaction at an automated teller machine, a 1-time debit card transaction, a transaction that involves the use of a check, or an automatic recurring payment.”  The bill defines a “covered period” as:  “(A) the period that begins 1 day after the date on which a major disaster is declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170), where assistance is authorized under section 408 of that Act (42 U.S.C. 5174), and ending 120 days after the end of the incident period for that disaster; or (B) the period that begins 1 day after the date on which the President determines an emergency exists under section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5191(b)) and simultaneously covers all States for a single incident, event, or emergency and ending 120 days after the end of the incident period for that emergency.”

The bill also provides a safe harbor for financial institutions, providing that “[i]f a depository institution assesses a checking account penalty fee during a covered period in violation of paragraph (1), the depository institution shall be considered to be in compliance with that paragraph if the depository institution promptly reverses that assessment.”  In addition to barring overdraft and NSF fees during a covered period, the bill would prohibit negative credit reporting by financial institutions: “[d]uring a covered period, no depository institution may report negative information regarding the use of overdraft coverage by a consumer to any consumer reporting agency.”  According to Congress.gov, the bill currently is before the Senate Committee on Banking, Housing, and Urban Affairs.

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