N.Y. Banking Law Section 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.

Source: Section 9-Y — Order of payment of checks and other debits, insufficient funds charges and return deposit item charges, https://www.­nysenate.­gov/legislation/laws/BNK/9-Y (updated Oct. 27, 2023; accessed Oct. 26, 2024).

1
Short title 2
Definitions 2‑A
Limited liability investment company 2‑B
Limited liability trust companies 4
Information to be given to social services officials, state department of social services, state department of mental hygiene, the mental... 4‑A
Banks to display signs 4‑B
Advertising 4‑C
Exemptions from certain provisions of chapter 5
Loans pursuant to the "Servicemen’s Readjustment Act of 1944 6
Investment in obligations of housing corporations indirectly guaranteed pursuant to the “Servicemen’s Readjustment Act of 1944” 6‑A
Investment in obligations of certain persons sixty-five years of age or over incurred to satisfy real property tax indebtedness 6‑C
Application forms to be made available 6‑D
Requirement to state in writing reason for denial of mortgage loan 6‑E
Graduated payment mortgages authorized 6‑F
Alternative mortgage instruments made by banks, trust companies, savings banks, savings and loan associations and credit unions 6‑G
Override of certain provisions of United States Public Law 97-320 6‑H
Reverse mortgage loans authorized 6‑I
Mortgage loans 6‑J
Proof of insurance 6‑K
Real property insurance escrow accounts 6‑L
High-cost home loans 6‑M
Subprime home loans 6‑N
Responsibility of banks for mortgages being processed for modification 6‑O
Single point of contact for modifying delinquent home loans 6‑O*2
Reverse cooperative apartment unit loans for persons sixty-two years of age or older 6‑P
Loan counseling for mortgages guaranteed by the Servicemen’s Readjustment Act of 1944 7
Payment of dividends or interest upon unclaimed deposits or shares 8
Deposits by custodian designated by administrator of veterans’ affairs, or by person certified by social security administration 9
Checks drawn against corporate funds or payable to corporations 9‑A
Defense of ultra vires 9‑B
Actions or special proceedings by superintendent or attorney-general 9‑C
Superintendent’s or attorney-general’s action for judicial dissolution 9‑D
Enforcement of section two hundred ninety-six-a of the executive law 9‑F
Geographic discrimination in making mortgage loans prohibited 9‑G
Right of set off 9‑H
Imposition of service charges prohibited 9‑I
Close-out fees prohibited in certain cases 9‑I*2
Prohibition on depositor of early withdrawal penalty in certain cases 9‑J
Disposal of records 9‑K
Sale of education loans 9‑M
Return of checks 9‑N
Trust accounts 9‑O
Mortgage loans 9‑P
Acceptance of certain checks for deposit 9‑R
Geographic restrictions 9‑S
Preauthorized electronic fund transfers 9‑T
Unsolicited mail-loan checks 9‑U
ATM transactions by persons using foreign bank accounts 9‑V
Savings promotion prize giveaway 9‑W
Standard financial aid award letter 9‑X
Mortgage forbearance 9‑X*2
Fees based on inactivity 9‑Y
Order of payment of checks and other debits, insufficient funds charges and return deposit item charges 9‑Z
Cashing of certain checks
Green check means up to date. Up to date

Accessed:
Oct. 26, 2024

Last modified:
Oct. 27, 2023

§ 9-Y’s source at nysenate​.gov

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