Who Do We Thank for Eliminating Overdraft Fees? Cuomo?
Andrew Cuomo is not finished putting in time as Governor of New York, not yet anyway. Earlier today Cuomo signed legislation that would require banks to take action to prevent overdraft fees.
I have to admit, I have been there. Pulled up to the ATM to get some cash in pocket. When I looked at the receipt I noticed the balance was in the negative. Then I realized I had a $37 overdraft fee. That stings because that $20 withdrawal ended up being a $57 hit.
According to CBS6 Albany, the legislation that Cuomo signed Thursday requires banks that have checking accounts to pay checks in the order they are received. In other words let's say you have $1000 in your checking account but you pay your $1400 rent by check. When that check is cashed the bank may decline to pay the check.
If that happens and the bank choose not to cover the check, the bank is now required to honor any smaller checks that can be paid with the existing account balance. So,again, if you have $1000 in your checking account and pay your $1400 rent the bank can decline. Then a $375 car payment and $200 National Grid bill payment comes to the bank, they would now be required to honor the 2 smaller checks. That wasn't the case previously.
The COVID pandemic had a devastating effect on our economy and as a result, many New Yorkers still struggle to pay their bills, and the arbitrary overdraft fees that banks have continued to issue only add insult to injury, - Governor Cuomo