GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

S	1 

SENATE BILL 876

Short Title:  Bad Check Fees to Schools.	(Public)

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Sponsors: Senator Ballance.

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Referred to:  Judiciary II/Election Laws

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May 1, 1995

A BILL TO BE ENTITLED
AN ACT TO PROVIDE MAXIMUM FEES THAT MAY BE CHARGED BY FINANCIAL INSTITUTIONS AND MERCHANTS FOR RETURNED CHECKS AND TO PROVIDE THAT A PORTION OF THE FEES COLLECTED BY FINANCIAL INSTITUTIONS FOR RETURNED CHECKS SHALL BE USED FOR PUBLIC SCHOOL BUILDING CAPITAL COSTS.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 53-65 reads as rewritten:
"§ 53-65.  Deposits payable on demand; collection of processing fee for returned checks.
(a)	Any bank may receive deposits of funds subject to withdrawals or to be paid upon the checks of the depositor. All deposits in such banks shall be payable on demand, without notice, except when the contract of deposit shall otherwise provide.
(b)	A bank may charge and collect a processing fee not to exceed ten dollars ($10.00) for each check or negotiable order of withdrawal draft drawn on that bank with respect to an account with insufficient funds.  Any amount charged by the bank in excess of five dollars ($5.00) shall be paid to the Commissioner on or before the fifteenth day of the month following the month in which the fee is paid to the bank.  In remitting the fee, the bank shall provide any information required by the Commissioner.  Information provided to the Commissioner pursuant to this subsection is not a public record as defined by G.S. 132-1 and may not be disclosed except as required by law.
(c)	The Commissioner shall remit all fees paid pursuant to this section to the State Treasurer.  The Treasurer shall, on a quarterly basis, distribute the net proceeds of the fee to the counties on a per capita basis according to the most recent annual population estimates certified to the Treasurer by the State Planning Officer.  The Treasurer shall determine the amount of the net proceeds by deducting from gross proceeds collected fees refunded and the cost to the State of collecting the fees.  Counties may use the proceeds distributed only for public school capital outlay purposes or to retire any indebtedness incurred by the county for these purposes.
(d)	The Commissioner may issue an administrative order against any bank that fails to comply with this section pursuant to G.S. 53-107.1 and Article 3A of Chapter 150B of the General Statutes.  Civil money penalties collected as a result shall be remitted to the State Treasurer and distributed pursuant to subsection (c) of this section."
Sec. 2.  G.S. 54-109.55 reads as rewritten:
"§ 54-109.55.  Deposits; collection of processing fee for returned checks.
(a)	A credit union may receive on deposit the savings of its members and also nonmembers in such amounts and upon such terms as the board of directors may determine and the bylaws shall provide.
(b)	A credit union may charge and collect a processing fee not to exceed ten dollars ($10.00) for each check or negotiable order of withdrawal draft drawn on that credit union with respect to an account with insufficient funds.  Any amount charged by the credit union in excess of five dollars ($5.00) shall be paid to the Administrator on or before the fifteenth day of the month following the month in which the fee is paid to the credit union.  In remitting the fee, the credit union shall provide any information required by the Administrator.  Information provided to the Administrator pursuant to this subsection is not a public record as defined by G.S. 132-1 and may not be disclosed except as required by law.
(c)	The Administrator shall remit all fees paid pursuant to this section to the State Treasurer.  The Treasurer shall, on a quarterly basis, distribute the net proceeds of the fee to the counties on a per capita basis according to the most recent annual population estimates certified to the Treasurer by the State Planning Officer.  The Treasurer shall determine the amount of the net proceeds by deducting from gross proceeds collected fees refunded and the cost to the State of collecting the fees.  Counties may use the proceeds distributed only for public school capital outlay purposes or to retire any indebtedness incurred by the county for these purposes.
(d)	Any credit union that fails to comply with this section shall pay a late penalty to the Administrator of seventy-five dollars ($75.00) for each day of noncompliance.  Penalties collected under this subsection shall be remitted to the State Treasurer and distributed pursuant to subsection (c) of this section."
Sec. 3.  G.S. 54B-147 reads as rewritten:
"§ 54B-147.  Collection of processing fee for returned checks.
(a)	Notwithstanding any other provision of law, a processing fee may be charged and collected by any association for checks (including negotiable order of withdrawal drafts) on which payment has been refused by the payor depository institution.
(b)	An association may also collect a processing fee not to exceed ten dollars ($10.00) for each check or negotiable order of withdrawal draft drawn on that association with respect to an account with insufficient funds. Any amount charged by the association in excess of five dollars ($5.00) shall be paid to the Administrator on or before the fifteenth day of the month following the month in which the fee is paid to the association.  In remitting the fee, the association shall provide any information required by the Administrator.  Information provided to the Administrator pursuant to this subsection is not a public record as defined by G.S. 132-1 and may not be disclosed except as required by law.
(c)	The Administrator shall remit all fees paid pursuant to this section to the State Treasurer.  The Treasurer shall, on a quarterly basis, distribute the net proceeds of the fee to the counties on a per capita basis according to the most recent annual population estimates certified to the Treasurer by the State Planning Officer.  The Treasurer shall determine the amount of the net proceeds by deducting from gross proceeds collected fees refunded and the cost to the State of collecting the fees.  Counties may use the proceeds distributed only for public school capital outlay purposes or to retire any indebtedness incurred by the county for these purposes.
(d)	The Administrator may issue an administrative order against any association that fails to comply with this section pursuant to G.S. 54B-64 and Article 3A of Chapter 150B of the General Statutes.  Civil money penalties collected as a result shall be remitted to the State Treasurer and distributed pursuant to subsection (c) of this section."
Sec. 4.  Article 8 of Chapter 54C of the General Statutes is amended by adding a new section to read:
"§ 54C-180.  Collection of processing fee for returned checks.
(a)	A savings bank may charge and collect a processing fee not to exceed ten dollars ($10.00) for each check or negotiable order of withdrawal draft drawn on that bank with respect to an account with insufficient funds.  Any amount charged by the savings bank in excess of five dollars ($5.00) shall be paid to the Administrator on or before the fifteenth day of the month following the month in which the fee is paid to the bank.  In remitting the fee, the savings bank shall provide any information required by the Administrator.  Information provided to the Administrator pursuant to this subsection is not a public record as defined by G.S. 132-1 and may not be disclosed except as required by law.
(b)	The Administrator shall remit all fees paid pursuant to this section to the State Treasurer.  The Treasurer shall, on a quarterly basis, distribute the net proceeds of the fee to the counties on a per capita basis according to the most recent annual population estimates certified to the Treasurer by the State Planning Officer.  The Treasurer shall determine the amount of the net proceeds by deducting from gross proceeds collected fees refunded and the cost to the State of collecting the fees.  Counties may use the proceeds distributed only for public school capital outlay purposes or to retire any indebtedness incurred by the county for these purposes.
(c)	The Administrator may issue an administrative order against any savings bank that fails to comply with this section pursuant to G.S. 54C-77 and Article 3A of Chapter 150B of the General Statutes.  Civil money penalties collected as a result shall be remitted to the State Treasurer and distributed pursuant to subsection (b) of this section."
Sec. 5.  G.S. 25-3-512 reads as rewritten:
"§ 25-3-512.  Collection of processing fee for returned checks.
A processing fee, not to exceed ten dollars ($10.00), may be charged and collected for checks on which payment has been refused by the payor bank because of insufficient funds or because the drawer did not have an account at that bank if at the time the consumer presented the check to the person, a sign:
(1)	was conspicuously posted on or in the immediate vicinity of the cash register;
(2)	was in plain view of anyone paying for goods or services by check;
(3)	was no smaller than 8 by 11 inches; and
(4)	stated the amount of the fee that would be charged for returned checks.
When the drawer sends a check by mail for payment of a debt and the check is dishonored and returned, the processing fee may be collected if the drawer was given prior written notice that a fee would be charged for returned checks. Any document that clearly and conspicuously states the amount of the fee that will be charged for returned checks and is delivered to the drawer or his agent, or is mailed first-class mail to the drawer at his last known address as part of any document requesting payment of a debt satisfies this notice requirement for that payment only.
If a collection agency collects or seeks to collect on behalf of its principal a processing fee as specified in this section in addition to the sum payable of a check, the amount of such processing fee must be separately stated on the collection notice.  The collection agency shall not collect or seek to collect from the drawer any sum other than the actual amount of the returned check and the specified processing fee."
Sec. 6.  This act becomes effective October 1, 1995, and applies to fees collected on or after that date.