OLR Bill Analysis

sHB 6485

AN ACT CONCERNING INACTIVE ACCOUNT FEES.

SUMMARY:

This bill prohibits a financial institution from imposing a dormancy fee on an inactive deposit account for which periodic statements are not provided if the primary account holder has another active account with the financial institution. The person must be the primary account holder on the second account, and the institution determines whether the account is active in accordance with the applicable transaction account contract.

The bill specifies that a person is a primary account holder if the account is (1) maintained primarily for personal, family, or household purposes and (2) currently filed (a) in the institution's records using the account holder's taxpayer identification as the primary number for tax reporting purposes or (b) in a way that the institution treats the individual as the primary account holder.

By law, a financial institution, which includes any Connecticut and federal bank and credit union, that imposes dormancy fees on certain inactive accounts must meet statutory notice requirements.

EFFECTIVE DATE: October 1, 2009

COMMENT

Possible Federal Preemption

It is possible that the portion of this bill relating to national banks may be preempted by federal law. States are limited in their ability to regulate national banks. With regard to fees, federal regulations provide that a national bank may charge its customers non-interest charges and fees, including deposit account service charges. The Office of the Comptroller of the Currency applies preemption principles derived from the United States Constitution, as interpreted through judicial precedent, when determining whether state laws apply that purport to limit or prohibit charges and fees (12 CFR § 7. 4002). Additionally, federal regulations provide that a national bank may exercise its deposit-taking powers without regard to state law limitations concerning abandoned and dormant accounts (12 CFR § 7. 4007).

COMMITTEE ACTION

Banks Committee

Joint Favorable Substitute