NYDFS Encourages Banks to Expand Access to Low-Cost Banking Services
April 15, NYDFS Published orientation determine that offering “Bank On” certified deposit accounts would satisfy a New York Basic Banking Services Act that requires institutions to offer low-cost banking services to consumers. According to NYDFS, Bank On accounts (which offer services that eliminate several fees, including overdraft, account activation, closure, dormancy, inactivity, and low balance fees) may be offered as an alternative to existing basic bank accounts. Following an assessment of the New York banking industry to determine the readiness and operational viability of the Bank On account offering, NYDFS concluded that “all New York State regulated banking institutions, as defined in Section 14-f.9(a) of New York Banking Law. . ., will be deemed to meet basic banking requirements under the New York Banking Law and Superintendent’s General Regulations, by offering Bank On accounts as an alternative to basic bank accounts. Banking institutions may offer Bank On accounts instead of basic bank accounts without the need to submit a separate application to NYDFS for approval. However, since national standards for Bank On accounts are subject to change without input from NYDFS, institutions offering the accounts should keep up to date with national standards.
Orientation follows a announcement by New York Governor Kathy Hochul, stating that “the COVID-19 pandemic has shown how important it is for every New Yorker to have financial security.” Emphasizing that “access to low-cost banking services is key to managing and securing their financial needs,” Hochul said that “[t]These new accounts will help hard-working people in underserved communities get the affordable and accessible banking options they need and are a critical step towards a more inclusive economy for all.