The Gold Book

Effective April 19, 2011, the NYS General Business Law section 399-zzz prohibits financial institutions from charging fees when sending paper billing statements through the mail.

Financial institutions may not charge fees or impose a higher rate on a loan product or other service if they have to send paper billing statements or if their customers want to make a payment through the mail. Also, there is no prohibition from offering a consumer a credit or other incentive to choose to make such payments or to receive billing statements by some other means, i.e., on-line.  Thus, an institution (creditor) could offer a lower rate or fee, or no fee or a non-financial incentive if its customer agrees to go “paperless”.  See Checking Accounts.

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As of July 21, 2011, The Dodd-Frank Wall Street Reform and Consumer Protection Act established additional requirements that employers must follow if they use consumer reports in making employment decisions to hire applicants or deny promotions to current employees. Refer to Fair Credit Reporting Act in the Human Resources chapter of  The Gold Book.

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A new federal regulation that is intended to protect Federal benefit payments held in deposit accounts from the reach of creditors will impose significant new requirements on financial institutions. The rule, which became effective on May 1, 2011, established procedures banks must follow with respect to garnishments and limits the ability of banks to freeze or restrain bank accounts in which certain federal benefits have been paid by direct deposit.

For further information, please refer to the Legal Processes chapter of The Gold Book  and new sub-section, Garnishments.

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On August 3, 2011, Governor Cuomo signed a new law which amends CPLR section 5224(a)(3) and adds subdivision 10 to section 601 and subdivision 3 to section 602 of the General Business Law.  These changes are intended to reduce the burden on financial institutions that receive many information subpoenas, with or without restraining notices, against deposit accounts.

For details, see Subpoenas and Subpoenas Duces Tecum in the Adverse Claims section of The Gold Book.

The FDIC, with the other FFIEC agencies, has issued the new guidance, which describes updated supervisory expectations regarding customer authentication, layered security, and other controls in an increasingly hostile online environment. Financial institutions will be expected to comply with the guidance no later than January 1, 2012.

The Gold Book chapter addressing Authentication for Internet Banking has been updated accordingly.