On Sep. 4, CAL LEG passed bill providing a cap on credit union fees.
CAL LEG passed SB 1075, credit union (CU) overdraft, nonsufficient funds (NSF) fees.
Adds S.14053 (NSF fee, overdraft) to Financial Code Div. 5 on CUs (CAL FIN 5-14053).
SB 1075 address results of report from SB 1415 showing that State-chartered CUs in California are generating substantial income from overdraft, NSF fees, see #149770.
Follows CFPB Jan. proposed overdraft fee rule for very large institutions, see #198155.
Bill Provisions
Makes two major provisions re amount of fees and required notice to member re fees.
Beginning on Jan. 1, 2026, a credit union shall not charge a fee for overdrafts or NSFs exceeding $14 per fee or the amount set by CFPB for the fees, whichever is lower.
Credit unions to notify members when a fee is placed, in most all cases to be sent on the same business day as the bank transaction unless unfeasible to do so same day.
SB-1075 stipulates seven items to be made in the notice including, if applicable, the amount of time for the CU member to return the account to a positive bank balance.
Legislative History
On Feb. 12, 2024, bill introduced in the Senate; on May 23, 2024, bill passed Senate.
On May 24, 2024, bill introduced in Assembly; on Aug. 27, 2024, bill passed Assembly.
On Aug. 28, 2024, bill Assembly amendments concurred in Senate, ordered to enroll.
On Sep. 4, 2024, bill enrolled by legislative chambers and presented to the governor.
Effectiveness
If approved, bill goes into effect Jan. 1, 2025.
Sep. 24, 2024 CAL LEG Governor Approval
On Sep. 24, 2024, CAL LEG reported bill SB 1075 approved by governor, Chapter 521.
Regulators
CAL LEG
Entity Types
CU
Reference
Ch. 521, 9/24/2024; Bill SB1075, 9/4/2024; TILA; Citation: CAL FIN 5;
