senate Bill S1195

Provides that every banking institution maintaining checking accounts for customers shall pay checks in the order received within account balance

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Sponsor

Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 05 / Jan / 2011
    • REFERRED TO BANKS
  • 04 / Jan / 2012
    • REFERRED TO BANKS

Summary

Provides that every banking institution which maintains checking accounts for customers shall pay checks in the order received within account balance; provides such banks may dishonor check for insufficient funds, but then must honor smaller checks within amounts on deposit in the subject account.

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Bill Details

Versions:
S1195
Legislative Cycle:
2011-2012
Current Committee:
Senate Banks
Law Section:
Banking Law
Laws Affected:
Add ยง9-v, Bank L
Versions Introduced in Previous Legislative Cycles:
2009-2010: S8146
2007-2008: A5974

Sponsor Memo

BILL NUMBER: S1195

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 :
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.
view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1195

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             January 5, 2011
                               ___________

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.
                                                           LBD05215-01-1

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