N.Y. Banking Law § 9-y: Order of payment of checks and other debits, insufficient funds charges and return deposit item charges

§ 9-y. Order of payment of checks and other debits, insufficient funds

charges and return deposit item charges. 1. Order of paying checks. (a)

Notwithstanding any law, rule or regulation to the contrary, every

banking organization that provides checking services to consumer

accounts shall either pay checks in the order wherein they are received

or pay checks from smallest to largest dollar amount for each business

day's transactions.

(b) If a check is dishonored for insufficient funds and thereafter

smaller checks which could be paid are received, the smaller checks

shall be honored within amounts on deposit in the subject account.

(c) The banking organization shall disclose to consumers in writing

the order in which checks are drawn. The written disclosure shall be

provided to the consumer at the time the account is opened and prior to

any change in such policy.

(d) The superintendent shall promulgate rules and regulations

necessary for the implementation of this section.

2. Regulation of other consumer account transactions and associated

fees. (a) The superintendent shall have the power to prescribe by

regulation:

i. the manner in which banking organizations process debit and credit

transactions, other than those specified in subdivision one of this

section, for consumer accounts maintained at such organization;

ii. the charges that may be imposed in connection with a check drawn

or other written order upon, or electronic transfer sought to be

effectuated against, insufficient funds or uncollected balances in a

consumer account, whether or not the banking organization pays such

check, written order, or electronic transfer;

iii. the charges that may be imposed in connection with a check or

other written order received by a banking organization for deposit or

collection drawn against a consumer account and subsequently dishonored

and returned for any reason by the drawee;

iv. disclosures provided to consumers regarding the processing of

transactions in a consumer account and the associated fees; and

v. alerts, notices, and other disclosures relating to the imposition

or possible imposition of a charge as provided in subparagraphs ii and

iii of this paragraph.

(b) In prescribing regulations regarding the manner in which banking

organizations process debit or credit transactions, or the charges that

may be imposed pursuant to subparagraphs ii or iii of paragraph (a) of

this subdivision, the superintendent shall consider, at a minimum, the

following factors:

i. the cost incurred by the banking organization, in providing any

services associated with such charges;

ii. the competitive position of the banking organization; and

iii. the maintenance of a safe and sound banking organization that

protects the public interest.

3. Definition. As used in this section, "consumer accounts" means

accounts at banking organizations established by natural persons

primarily for personal, family or household purposes.