08-R068

2008 -- S 2041

Enacted 02/27/08

S E N A T E R E S O L U T I O N

RESPECTFULLY URGING THE UNITED STATES CONGRESS TO LIMIT THE NON-

SUFFICIENT FUNDS FEE IMPOSED BY FINANCIAL INSTITUTIONS

Introduced By: Senators Ciccone, Felag, Ruggerio, Connors, and Tassoni

Date Introduced: January 10, 2008

     WHEREAS, The fees charged by banking and financial institutions for overdrafts and

bounced checks varies widely from one institution to the next, and often leaves consumers with a

bank charge greater than the original overdraft; and

      WHEREAS, If the bank or financial institution pays a check, even though there are

insufficient funds in a consumer’s account, they may charge an “overdraft” fee. If the check is

returned to the consumer without being paid by the bank, a “bounced-check” or “nonsufficient

funds” fee may be imposed. Also, the person or company that the check was written to may

charge a “returned-check” fee, in addition to the fee charged by the bank; and

      WHEREAS, In 2004, the Check Clearing for the 21st Century Act was implemented.

The Act enabled banking and financial institutions to reduce their check processing time.

Unfortunately, this has led to an increase in overdrafts and consequently, the associated charges

and fees for many Rhode Island consumers; and

     WHEREAS, The Federal Reserve Board regulates these charges dependent upon the type

of financial institution in question, thus allowing a state-chartered bank to impose different fees

than a credit union or national bank; and

      WHEREAS, The cost to financial institutions for handling overdraft transactions is less

than $5.00, yet many institutions charge multiple fees of up to $20.00 to $30.00 to their

customers. The need for a fair and equitable rate, as well as uniformity across all these

institutions is essential and just; now, therefore be it

      RESOLVED, This Senate of the State of Rhode Island and Providence Plantations

hereby urges the United States Congress to take immediate action to limit the bounced-check fee

imposed by financial institutions to a maximum of five dollars ($5.00) in order to more fully

protect consumers rights; and be it further

      RESOLVED, That the Secretary of State be and he hereby is authorized and directed to

transmit duly certified copies of this resolution to the Rhode Island Congressional Delegation.

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LC00030

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