Galloway Introduces Bills to Waive Penalties for Early Withdrawal & Fees for Remote Transactions
State Rep. John Galloway, D-Bucks, announced that his Covid-19 related bills, which would waive penalties for early CD withdrawals during COVID-19 (H.B. 2580) and would waive fees for remote banking and ATM charges during COVID-19 (H.B. 2581), were both introduced and referred to the House Consumer Affairs Committee on Monday.
“Families across Pennsylvania have been hard hit financially from the repercussions of the Covid-19 pandemic,” Galloway said. “My bills are aimed at alleviating the pains that have ensued by removing penalties from early withdrawals of CDs and by making it illegal for financial institutions to charge fees for remote transactions or uses of ATMs.
“If they were enacted, both bills would be in effect until 90 days after the COVID-19 disaster emergency declaration issued by the governor has expired.”
Galloway said that CDs, or a certificates of deposit, are popular products offered by banks and credit unions because they provide higher interest rates in exchange for leaving a lump-sum deposit untouched for a period of 6 months to 3 or more years.. At the end of the term, known as the maturity date, the depositor can withdraw his or her funds penalty free, and with a few dollars in earned interest on top of the initial deposit.
According to Galloway, CDs are a safer and more conservative way for people to invest their money than entering the stock or bond market. But they do come with early withdrawal penalties.
“With many people now living paycheck to paycheck, or waiting for their stimulus check or unemployment benefits to arrive, it is unfair to charge them for withdrawing money they need to survive,” Galloway commented.
H.B. 2580 would make it a violation of the Unfair Trade Practices and Consumer Protection Law for a financial institution to charge a penalty for early withdrawal of CDs from the day the bill is signed into law until 90 days after the COVID-19 disaster emergency declaration issued by the governor has expired.
“During the COVID-19 pandemic, many bank and credit unions are only open by appointment, making it a necessity for many Pennsylvanians to use ATMs to access their money,” Galloway said. “During a time of unprecedented economic hardship for many families, fees or charges for remote banking can almost make or break a family’s monthly budget.”
H.B. 2581 would make it a violation of the Unfair Trade Practices and Consumer Protection Law for a financial institution to charge a fee for a remote transaction or use of an ATM that took place from the effective date the bill passes into law until 90 days after the COVID-19 disaster emergency declaration issued by the governor has expired.
“I hope these bills have a speedy passage through the legislature so they can provide assistance to Pennsylvanians when they need it most,” Galloway said.