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Bill

HD 565

An Act to require financial institutions to pay late fees when it fails to conduct an electronic transfer

194th Legislature (2025-2026) Introduced by Tackey Chan

Requires Massachusetts banks to reimburse customers' late fees when institutional transfer delays cause payment failures.

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WeVote Research Nonpartisan
Bill Summary · HD 565

Legislative bill overview

HD 565 would require financial institutions to pay late fees to customers when the institution itself fails to complete an electronic transfer in a timely manner. The bill shifts responsibility for transfer delays from customers to banks, imposing financial penalties on institutions that miss their obligations rather than passing costs to consumers.

Why is this important

This addresses a real consumer protection gap where banks can delay transfers without penalty while customers face late fees from third parties for missed payments caused by institutional delays. The bill could incentivize banks to improve their electronic payment systems and provide compensation for customer harm caused by institutional failures.

Potential points of contention

  • Financial burden on institutions: Banks argue compliance costs and liability exposure could increase operational expenses and potentially raise customer fees elsewhere
  • Defining "failure" and timelines: Ambiguity over what constitutes unacceptable delay, technical glitches versus negligence, and appropriate fee amounts could create enforcement challenges
  • Competitive disadvantage: Massachusetts institutions might face costs competitors in other states don't, potentially affecting their market position
  • Coverage scope: Unclear whether this applies to all electronic transfers (ACH, wire, debit card payments) or specific types, and whether it covers all institutions or just banks

Compiled from official sources — confirm details with the bill’s official record.

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