To amend the Expedited Funds Availability Act to redress imbalances between the faster withdrawals permitted under the Check 21 Act and the slower rates for crediting deposits, and for other purposes.

February 15, 2005

Mrs. MALONEY (for herself, Mr. SANDERS, Ms. WATSON, Ms. WATERS, Mr. GEORGE MILLER of California, Mr. ENGEL, Mr. MCDERMOTT, Mr. WEINER, Mr. GUTIERREZ, Mr. JACKSON of Illinois, and Mr. CUMMINGS) introduced the following bill; which was referred to the Committee on Financial Services

To amend the Expedited Funds Availability Act to redress imbalances between the faster withdrawals permitted under the Check 21 Act and the slower rates for crediting deposits, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Consumer Checking Account Fairness Act'.

SEC. 2. ADJUSTMENT OF CHECK HOLD PERIODS REQUIRED.

(a) In General- Section 603(d) of the Expedited Funds Availability Act (12 U.S.C. 4002(d)) is amended by adding at the end the following new paragraph:

`(3) COORDINATION WITH CHECK CLEARING FOR THE 21ST CENTURY ACT-

`(A) IN GENERAL- The Board shall prescribe regulations under paragraph (1)--

`(i) to reduce the time periods under subsections (a), (b), or (e), in accordance with the requirements of paragraph (1), to take into account the time within which any receiving institution can reasonably expect to learn of the nonpayment of most items for each category of checks under the Checking Clearing for the 21st Century Act or the regulations implementing such Act; and

`(ii) to eliminate distinctions between the schedules established under subsections (a), (b), or (e) if the Board finds that such distinctions no longer have any significance for any category of checks under the Checking Clearing for the 21st Century Act or the regulations implementing such Act.

`(B) PARAGRAPH (2) ADJUSTMENTS- The Board shall, by regulation, eliminate the extension provided under paragraph (2) for deposits of any category of checks if the Board finds that the extension has no substantial usefulness under the Checking Clearing for the 21st Century Act or the regulations implementing such Act.'.

(b) Regulations- The Board shall prescribe the regulations required under the amendment made by subsection (a) in final form before the end of the 6-month period beginning on the date of the enactment of this Act.

SEC. 3. AMENDMENTS RELATING TO CHECKING ACCOUNT CONSUMERS.

(a) Deposits at Proprietary ATMs- Section 603(a)(2) of the Expedited Funds Availability Act (12 U.S.C. 4002(a)(2)) is amended--

(1) in subparagraphs (B)(ii) and (C)(ii), by inserting `or is deposited at a proprietary ATM' before the semicolon at the end of each such subparagraph; and

(2) in subparagraph (E), by inserting `, or a check deposited at a proprietary ATM,' after `deposited in a branch of a depository institution'.

(b) Limitation on Certain Fees During Check Hold Period- Section 607 of the Expedited Funds Availability Act (12 U.S.C. 4006) is amended by adding at the end the following new subsection:

`(f) Limitation on Certain Fees During Check Hold Period- If a receiving depository institution has received a provisional or final settlement with respect to a check deposited in an account at the depository institution and such depository institution has not yet made the proceeds of the deposit available to the accountholder, the receiving depository institution may not assess any fee for an overdraft, or any fee associated with the payment of an overdraft, that would not have occurred if such funds so deposited were available.'.

(c) Credits Required to Be Posted Before Debits- Section 607 of the Expedited Funds Availability Act (12 U.S.C. 4006) is amended by inserting after subsection (f) (as added by subsection (b) of this section) the following new subsection:

`(g) Order of Posting- In the process of posting credits and debits against a checking account used primarily for personal, family, or household purposes after the close of any business day, the receiving depository institution shall credit all deposits to the account before debiting any check drawn on the account and presented to the depository institution for payment.'.

(d) Saturdays May Be Treated as Business Days- Section 602(3) of the Expedited Funds Availability Act (12 U.S.C. 4001(3)) is amended by adding at the end the following new sentence: `For purposes of this title, however, Saturday shall be treated as a business day in the calculation of any period within which funds deposited in an account at a receiving depository institution are required be made available under this title, if with respect to checks received by the depository institution for which it is the originating institution, the depository institution debits accounts on Saturdays for such checks.'.

(e) Reduction in Check Holds for Nonlocal Check Deposits- Section 603(b)(2) of the Expedited Funds Availability Act (12 U.S.C. 4002(b)(2)) is amended by striking `not more than 4 business days shall intervene between' and inserting `funds shall be made available on the 2nd business day after'.

(f) Adjustment for Inflation for Large Check Limitation-

(1) IN GENERAL- Section 604(a)(3) of the Expedited Funds Availability Act (12 U.S.C. 4003(a)(3)) is amended by striking `$5,000' each place such term appears and inserting `$7,500'.

(2) CLERICAL AMENDMENT- The paragraph heading for section 604(a)(3) of the Expedited Funds Availability Act is amended by striking `$5,000' and inserting `$7,500'.

(g) Adjustment for Small Deposit Availability-

(1) IN GENERAL- Section 603(a)(2)(D) of of the Expedited Funds Availability Act (12 U.S.C. 4002(a)(2)(D)) is amended by striking `$100' and inserting `$500'.

(2) TECHNICAL AND CONFORMING AMENDMENT- The heading for subparagraph (C) of section 603(b)(3) of the Expedited Funds Availability Act (12 U.S.C. 4002(b)(3)(C)) is amended by striking `$100 AVAILABILITY' and inserting `COORDINATION WITH OTHER AMOUNT AVAILABLE'.

(h) Fees for Services not Requested- Section 607 of the Expedited Funds Availability Act (12 U.S.C. 4006) is amended by inserting after subsection (g) (as added by subsection (c) of this section) the following new subsection:

`(h) Fees for Services not Requested- No depository institution may impose any fee for paying any check drawn on an account in spite of a lack of sufficient funds in the account to pay such check or any similar activity (commonly referred to as `bounce protection') unless the accountholder has affirmatively requested such service.'.

(i) Clarification of Preemption- Section 608 of the Expedited Funds Availability Act (12 U.S.C. 4007) is amended--

(1) in subsection (b)--

(A) by inserting `or (c)' after `subsection (a)'; and

(B) by inserting `, but only to the extent of any such inconsistency' before the period at the end; and

(2) by adding at the end the following new subsection:

`(c) Clarification of Inconsistency- A State law shall not be construed as inconsistent with this title, or any regulation prescribed under this title, if the protection such law affords the consumer by such law is greater than the protection afforded by this title. For purposes of determining congressional intent with respect to preemption, the purpose of this title shall be construed to be the establishment of a minimum basis of protection for the consumer and not the creation of a uniform national rule.'.

SEC. 4. RECREDIT FOR ALL CONSUMERS UNLESS SUBSTITUTE CHECKS ARE PROVIDED WITHOUT COST UPON REQUEST.

Section 7(b) of the Checking for the 21st Century Act (12 U.S.C. 5006(b)) is amended by adding at the end the following new paragraph:

`(3) FEES FOR SUBSTITUTE CHECKS- If any bank that holds the account of a consumer imposes any fee for producing a copy of a substitute check for such consumer with respect to such account, the expedited recredit process established under this section shall be available for all charges initiated by check against any such account regardless of whether a substitute check was involved or was provided to the consumer.'.

END