Senator Christopher J. Connors, Assemblyman Brian E. Rumpf and Assemblywoman DiAnne Gove are set to introduce legislation that would permit municipalities and counties to increase the service charge imposed for checks returned for insufficient funds.
Under current law, the service fee imposed by a municipality or county cannot exceed $20 per check. The 9th District Delegation’s legislative initiative would allow municipalities and counties to impose a service charge up to, but not to exceed, the usual customary service charge of the commercial banking institution where the municipality deposits its checks and other written instruments.
“Typically, banks are charging government entities service fees greater than which the municipalities and counties are permitted under existing law to impose for returned checks. As a consequence, local taxpayers are forced to absorb the additional costs from the discrepancy in service charge fees.
“In these difficult budgetary times in which counties and municipalities are cash-strapped, their bare-bones budgets simply cannot afford to take on the additional costs associated with returned checks. While this issue may not constitute an excessive cost to every county and municipality, it is nonetheless an area of state law that needs to be updated to reflect the current cost of banking services.
“This legislation would allow our government to operate more like a business by eliminating a wasteful cost which unnecessarily burdens local taxpayers. It is also a matter of fairness to those residents who do not and would not write bad checks, but are required to cover the associated costs for those who do.
“To protect taxpayers from the service fee being used as a means of generating additional revenue, our bill prohibits counties and municipalities from charging a service fee exceeding the fee imposed by the bank used by the county or municipality. Additionally, this provision would also prevent the service fee charged to the writer of the bad check from being excessive. The amount of the fee imposed would simply cover the cost of the service fee charged to the government entity.”