S1156-2013 Actions

• Jan 9, 2013: REFERRED TO BANKS

S1156-2013 Memo

BILL NUMBER:S1156

TITLE OF BILL:
An act
to amend the banking law, in relation to the order in which a payor bank
shall pay checks

PURPOSE OR GENERAL IDEA OF BILL:
Provides that every banking institution maintaining checking accounts
for customers shall pay checks in the order received within account
balances.

SUMMARY OF SPECIFIC PROVISIONS:
A new section 9-V is added to the banking law to require that every
banking institution maintaining checking accounts for customers shall
pay checks in the order received; provided, however, that 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 the amounts on deposit in the subject account.

JUSTIFICATION:
Under current law if a check is presented to a banking institution for
a customer maintaining a checking account in that banking institution
which exceeds the funds available in the account the check is
dishonored and all subsequent checks received by that bank. This
occurs, even if there is sufficient funds in the account to honor one
or more of the subsequent checks. This would require the banks to
honor subsequent checks if the customer's account has sufficient
funds to cover those checks.

PRIOR LEGISLATIVE HISTORY:
2011-12: S.1195 Remained in the Senate Committee on Banks
2009-10: S.8146/A.6685 Remained in the Senate Committee on Banks/
         Passed the Assembly

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law.

S1156-2013 Text

 S T A T E   O F   N E W   Y O R K
 
 
                                         1156
 2013-2014 Regular Sessions
 I N  SENATE
 (PREFILED)
 January 9, 2013
 
 Introduced  by  Sen. BRESLIN -- read twice and ordered printed, and when
 printed to be committed to the Committee on Banks
 

AN ACT to amend the banking law, in relation to the  order  in  which  a
 payor bank shall pay checks
 

THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section 1. The banking law is amended by adding a new section  9-v  to
 read as follows:

 

S  9-V.  BANKING  INSTITUTIONS TO PAY CHECKS DRAWN THEREIN IN ORDER OF
 PRESENTATION.  NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION TO  THE
 CONTRARY, EVERY BANKING INSTITUTION WHICH PROVIDES CHECKING ACCOUNTS FOR
 ITS CUSTOMERS SHALL, IN PAYING SUCH CHECKS AS ARE PRESENTED FOR PAYMENT,
 PAY  THE CHECKS IN THE ORDER WHEREIN THEY ARE RECEIVED; PROVIDED, HOWEV
 ER, IF A CHECK IS DISHONORED FOR INSUFFICIENT FUNDS AND THEREAFTER SMAL
 LER CHECKS WHICH COULD BE PAID ARE RECEIVED, THE SMALLER CHECKS SHALL BE
 HONORED WITHIN AMOUNTS ON DEPOSIT IN THE SUBJECT ACCOUNT.
 

S 2. This act shall take effect on the first of January next  succeed
 ing the date on which it shall have become a law.
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD01720-01-3

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