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CA Bill Targets Overdraft & NSF at State-Chartered Credit Unions

Senate Bill 1075 has been introduced in the California State Senate by Sen. Steven Bradford (D-Gardena). According to this legislation, which targets overdraft and non-sufficient funds (NSF) fees at state-chartered credit unions, a credit union must:

  • Provide a member at least five business days before requiring payment of an overdraft fee or NSF fee to give the member an opportunity to repay the amount that triggered the fee.
  • Not charge more than three overdraft fees or NSF fees per month.
  • Disclose these requirements to members by January 31, 2025, and annually thereafter.

The California Credit Union League looks forward to advocating for state-chartered credit unions to ensure their members still have access to these essential financial services. The League has had preliminary conversations with Bradford’s office and will continue these discussions.

As a reminder, the California and Nevada Credit Union Leagues are already heavily engaged on the frontline when it comes to overdraft/NSF proposals and guidance coming out of Washington, D.C., including the Consumer Financial Protection Bureau’s (CFPB) proposed overdraft rule and proposed NSF rule, as well as forthcoming overdraft/NSF call report data collection guidance from the National Credit Union Administration (NCUA).

Additionally, the Credit Union Overdraft Resources site for League members includes talking points, facts, research, a downloadable opinion-editorial template, and a regulatory timeline. Credit union leaders can take advantage of these resources to support credit union media relations efforts and internal conversations with staff.

The California League will stay vigilant on Senate Bill 1075 in California and keep credit union leaders updated as the situation evolves.

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