| 1 | | - | Senate Bill No. 1075 CHAPTER 521An act to add Section 14053 to the Financial Code, relating to credit unions. [ Approved by Governor September 24, 2024. Filed with Secretary of State September 24, 2024. ] LEGISLATIVE COUNSEL'S DIGESTSB 1075, Bradford. Credit unions: overdraft and nonsufficient funds fees.The California Credit Union Law generally provides for the organization and regulation of credit unions by the Commissioner of Financial Protection and Innovation. Existing law requires a credit union subject to the examination authority of the commissioner to report annually to the commissioner on the amount of revenue earned from overdraft fees and nonsufficient funds fees, as defined and specified.This bill would require a credit union to provide a member a notice each time the credit union assesses an overdraft fee or nonsufficient funds fee, as specified. Beginning January 1, 2026, the bill would prohibit a credit union from charging an overdraft fee or a nonsufficient funds fee exceeding $14 or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 14053 is added to the Financial Code, to read:14053. (a) For purposes of this section, the following definitions apply:(1) Fee means a nonsufficient funds fee or an overdraft fee.(2) Nonsufficient funds fee means a fee resulting from the initiation of a transaction that exceeds the members available account balance if the members credit union declines to make the payment.(3) Overdraft fee means a fee resulting from the processing of a transaction that exceeds a members available account balance.(b) (1) A credit union shall provide a notice to a member each time the credit union assesses a fee that meets all of the following requirements:(A) The notice shall be provided to the member using a communication method designated by the member for receiving this type of notice.(B) The notice shall be provided on the same business day the transaction that resulted in the fee occurred, unless it is not feasible to provide the notice that day, in which case the notice shall be provided on the next business day.(C) The notice shall contain all of the following:(i) The date of the transaction.(ii) The type of transaction.(iii) Whether the transaction was declined or processed.(iv) If applicable, the amount of the overdraft that results from the transaction.(v) If applicable, the amount necessary to return the account to a positive balance.(vi) If applicable, the consequences of not returning the account to a positive balance within a certain timeframe.(vii) If applicable, the amount of time the member has to return the account to a positive balance to avoid the consequences described in clause (vi).(2) If the account has more than one accountholder, provision of the notice described in paragraph (1) to any accountholder shall be sufficient.(c) Beginning January 1, 2026, a credit union shall not charge a fee exceeding fourteen dollars ($14) or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower. |
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| 1 | + | Enrolled August 30, 2024 Passed IN Senate August 28, 2024 Passed IN Assembly August 27, 2024 Amended IN Assembly June 24, 2024 Amended IN Senate May 20, 2024 Amended IN Senate May 09, 2024 Amended IN Senate April 09, 2024 Amended IN Senate April 08, 2024 CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Senate Bill No. 1075Introduced by Senators Bradford and LimnFebruary 12, 2024An act to add Section 14053 to the Financial Code, relating to credit unions. LEGISLATIVE COUNSEL'S DIGESTSB 1075, Bradford. Credit unions: overdraft and nonsufficient funds fees.The California Credit Union Law generally provides for the organization and regulation of credit unions by the Commissioner of Financial Protection and Innovation. Existing law requires a credit union subject to the examination authority of the commissioner to report annually to the commissioner on the amount of revenue earned from overdraft fees and nonsufficient funds fees, as defined and specified.This bill would require a credit union to provide a member a notice each time the credit union assesses an overdraft fee or nonsufficient funds fee, as specified. Beginning January 1, 2026, the bill would prohibit a credit union from charging an overdraft fee or a nonsufficient funds fee exceeding $14 or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 14053 is added to the Financial Code, to read:14053. (a) For purposes of this section, the following definitions apply:(1) Fee means a nonsufficient funds fee or an overdraft fee.(2) Nonsufficient funds fee means a fee resulting from the initiation of a transaction that exceeds the members available account balance if the members credit union declines to make the payment.(3) Overdraft fee means a fee resulting from the processing of a transaction that exceeds a members available account balance.(b) (1) A credit union shall provide a notice to a member each time the credit union assesses a fee that meets all of the following requirements:(A) The notice shall be provided to the member using a communication method designated by the member for receiving this type of notice.(B) The notice shall be provided on the same business day the transaction that resulted in the fee occurred, unless it is not feasible to provide the notice that day, in which case the notice shall be provided on the next business day.(C) The notice shall contain all of the following:(i) The date of the transaction.(ii) The type of transaction.(iii) Whether the transaction was declined or processed.(iv) If applicable, the amount of the overdraft that results from the transaction.(v) If applicable, the amount necessary to return the account to a positive balance.(vi) If applicable, the consequences of not returning the account to a positive balance within a certain timeframe.(vii) If applicable, the amount of time the member has to return the account to a positive balance to avoid the consequences described in clause (vi).(2) If the account has more than one accountholder, provision of the notice described in paragraph (1) to any accountholder shall be sufficient.(c) Beginning January 1, 2026, a credit union shall not charge a fee exceeding fourteen dollars ($14) or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower. |
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| 14 | 28 | | |
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| 15 | 29 | | LEGISLATIVE COUNSEL'S DIGEST |
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| 16 | 30 | | |
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| 17 | 31 | | ## LEGISLATIVE COUNSEL'S DIGEST |
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| 18 | 32 | | |
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| 19 | 33 | | SB 1075, Bradford. Credit unions: overdraft and nonsufficient funds fees. |
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| 20 | 34 | | |
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| 21 | 35 | | The California Credit Union Law generally provides for the organization and regulation of credit unions by the Commissioner of Financial Protection and Innovation. Existing law requires a credit union subject to the examination authority of the commissioner to report annually to the commissioner on the amount of revenue earned from overdraft fees and nonsufficient funds fees, as defined and specified.This bill would require a credit union to provide a member a notice each time the credit union assesses an overdraft fee or nonsufficient funds fee, as specified. Beginning January 1, 2026, the bill would prohibit a credit union from charging an overdraft fee or a nonsufficient funds fee exceeding $14 or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower. |
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| 22 | 36 | | |
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| 23 | 37 | | The California Credit Union Law generally provides for the organization and regulation of credit unions by the Commissioner of Financial Protection and Innovation. Existing law requires a credit union subject to the examination authority of the commissioner to report annually to the commissioner on the amount of revenue earned from overdraft fees and nonsufficient funds fees, as defined and specified. |
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| 24 | 38 | | |
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| 25 | 39 | | This bill would require a credit union to provide a member a notice each time the credit union assesses an overdraft fee or nonsufficient funds fee, as specified. Beginning January 1, 2026, the bill would prohibit a credit union from charging an overdraft fee or a nonsufficient funds fee exceeding $14 or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower. |
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| 26 | 40 | | |
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| 27 | 41 | | ## Digest Key |
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| 28 | 42 | | |
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| 29 | 43 | | ## Bill Text |
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| 30 | 44 | | |
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| 31 | 45 | | The people of the State of California do enact as follows:SECTION 1. Section 14053 is added to the Financial Code, to read:14053. (a) For purposes of this section, the following definitions apply:(1) Fee means a nonsufficient funds fee or an overdraft fee.(2) Nonsufficient funds fee means a fee resulting from the initiation of a transaction that exceeds the members available account balance if the members credit union declines to make the payment.(3) Overdraft fee means a fee resulting from the processing of a transaction that exceeds a members available account balance.(b) (1) A credit union shall provide a notice to a member each time the credit union assesses a fee that meets all of the following requirements:(A) The notice shall be provided to the member using a communication method designated by the member for receiving this type of notice.(B) The notice shall be provided on the same business day the transaction that resulted in the fee occurred, unless it is not feasible to provide the notice that day, in which case the notice shall be provided on the next business day.(C) The notice shall contain all of the following:(i) The date of the transaction.(ii) The type of transaction.(iii) Whether the transaction was declined or processed.(iv) If applicable, the amount of the overdraft that results from the transaction.(v) If applicable, the amount necessary to return the account to a positive balance.(vi) If applicable, the consequences of not returning the account to a positive balance within a certain timeframe.(vii) If applicable, the amount of time the member has to return the account to a positive balance to avoid the consequences described in clause (vi).(2) If the account has more than one accountholder, provision of the notice described in paragraph (1) to any accountholder shall be sufficient.(c) Beginning January 1, 2026, a credit union shall not charge a fee exceeding fourteen dollars ($14) or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower. |
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| 32 | 46 | | |
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| 33 | 47 | | The people of the State of California do enact as follows: |
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| 34 | 48 | | |
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| 35 | 49 | | ## The people of the State of California do enact as follows: |
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| 36 | 50 | | |
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| 37 | 51 | | SECTION 1. Section 14053 is added to the Financial Code, to read:14053. (a) For purposes of this section, the following definitions apply:(1) Fee means a nonsufficient funds fee or an overdraft fee.(2) Nonsufficient funds fee means a fee resulting from the initiation of a transaction that exceeds the members available account balance if the members credit union declines to make the payment.(3) Overdraft fee means a fee resulting from the processing of a transaction that exceeds a members available account balance.(b) (1) A credit union shall provide a notice to a member each time the credit union assesses a fee that meets all of the following requirements:(A) The notice shall be provided to the member using a communication method designated by the member for receiving this type of notice.(B) The notice shall be provided on the same business day the transaction that resulted in the fee occurred, unless it is not feasible to provide the notice that day, in which case the notice shall be provided on the next business day.(C) The notice shall contain all of the following:(i) The date of the transaction.(ii) The type of transaction.(iii) Whether the transaction was declined or processed.(iv) If applicable, the amount of the overdraft that results from the transaction.(v) If applicable, the amount necessary to return the account to a positive balance.(vi) If applicable, the consequences of not returning the account to a positive balance within a certain timeframe.(vii) If applicable, the amount of time the member has to return the account to a positive balance to avoid the consequences described in clause (vi).(2) If the account has more than one accountholder, provision of the notice described in paragraph (1) to any accountholder shall be sufficient.(c) Beginning January 1, 2026, a credit union shall not charge a fee exceeding fourteen dollars ($14) or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower. |
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| 38 | 52 | | |
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| 39 | 53 | | SECTION 1. Section 14053 is added to the Financial Code, to read: |
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| 40 | 54 | | |
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| 41 | 55 | | ### SECTION 1. |
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| 42 | 56 | | |
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| 43 | 57 | | 14053. (a) For purposes of this section, the following definitions apply:(1) Fee means a nonsufficient funds fee or an overdraft fee.(2) Nonsufficient funds fee means a fee resulting from the initiation of a transaction that exceeds the members available account balance if the members credit union declines to make the payment.(3) Overdraft fee means a fee resulting from the processing of a transaction that exceeds a members available account balance.(b) (1) A credit union shall provide a notice to a member each time the credit union assesses a fee that meets all of the following requirements:(A) The notice shall be provided to the member using a communication method designated by the member for receiving this type of notice.(B) The notice shall be provided on the same business day the transaction that resulted in the fee occurred, unless it is not feasible to provide the notice that day, in which case the notice shall be provided on the next business day.(C) The notice shall contain all of the following:(i) The date of the transaction.(ii) The type of transaction.(iii) Whether the transaction was declined or processed.(iv) If applicable, the amount of the overdraft that results from the transaction.(v) If applicable, the amount necessary to return the account to a positive balance.(vi) If applicable, the consequences of not returning the account to a positive balance within a certain timeframe.(vii) If applicable, the amount of time the member has to return the account to a positive balance to avoid the consequences described in clause (vi).(2) If the account has more than one accountholder, provision of the notice described in paragraph (1) to any accountholder shall be sufficient.(c) Beginning January 1, 2026, a credit union shall not charge a fee exceeding fourteen dollars ($14) or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower. |
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| 44 | 58 | | |
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| 45 | 59 | | 14053. (a) For purposes of this section, the following definitions apply:(1) Fee means a nonsufficient funds fee or an overdraft fee.(2) Nonsufficient funds fee means a fee resulting from the initiation of a transaction that exceeds the members available account balance if the members credit union declines to make the payment.(3) Overdraft fee means a fee resulting from the processing of a transaction that exceeds a members available account balance.(b) (1) A credit union shall provide a notice to a member each time the credit union assesses a fee that meets all of the following requirements:(A) The notice shall be provided to the member using a communication method designated by the member for receiving this type of notice.(B) The notice shall be provided on the same business day the transaction that resulted in the fee occurred, unless it is not feasible to provide the notice that day, in which case the notice shall be provided on the next business day.(C) The notice shall contain all of the following:(i) The date of the transaction.(ii) The type of transaction.(iii) Whether the transaction was declined or processed.(iv) If applicable, the amount of the overdraft that results from the transaction.(v) If applicable, the amount necessary to return the account to a positive balance.(vi) If applicable, the consequences of not returning the account to a positive balance within a certain timeframe.(vii) If applicable, the amount of time the member has to return the account to a positive balance to avoid the consequences described in clause (vi).(2) If the account has more than one accountholder, provision of the notice described in paragraph (1) to any accountholder shall be sufficient.(c) Beginning January 1, 2026, a credit union shall not charge a fee exceeding fourteen dollars ($14) or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower. |
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| 46 | 60 | | |
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| 47 | 61 | | 14053. (a) For purposes of this section, the following definitions apply:(1) Fee means a nonsufficient funds fee or an overdraft fee.(2) Nonsufficient funds fee means a fee resulting from the initiation of a transaction that exceeds the members available account balance if the members credit union declines to make the payment.(3) Overdraft fee means a fee resulting from the processing of a transaction that exceeds a members available account balance.(b) (1) A credit union shall provide a notice to a member each time the credit union assesses a fee that meets all of the following requirements:(A) The notice shall be provided to the member using a communication method designated by the member for receiving this type of notice.(B) The notice shall be provided on the same business day the transaction that resulted in the fee occurred, unless it is not feasible to provide the notice that day, in which case the notice shall be provided on the next business day.(C) The notice shall contain all of the following:(i) The date of the transaction.(ii) The type of transaction.(iii) Whether the transaction was declined or processed.(iv) If applicable, the amount of the overdraft that results from the transaction.(v) If applicable, the amount necessary to return the account to a positive balance.(vi) If applicable, the consequences of not returning the account to a positive balance within a certain timeframe.(vii) If applicable, the amount of time the member has to return the account to a positive balance to avoid the consequences described in clause (vi).(2) If the account has more than one accountholder, provision of the notice described in paragraph (1) to any accountholder shall be sufficient.(c) Beginning January 1, 2026, a credit union shall not charge a fee exceeding fourteen dollars ($14) or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower. |
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| 48 | 62 | | |
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| 49 | 63 | | |
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| 50 | 64 | | |
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| 51 | 65 | | 14053. (a) For purposes of this section, the following definitions apply: |
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| 52 | 66 | | |
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| 53 | 67 | | (1) Fee means a nonsufficient funds fee or an overdraft fee. |
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| 54 | 68 | | |
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| 55 | 69 | | (2) Nonsufficient funds fee means a fee resulting from the initiation of a transaction that exceeds the members available account balance if the members credit union declines to make the payment. |
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| 56 | 70 | | |
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| 57 | 71 | | (3) Overdraft fee means a fee resulting from the processing of a transaction that exceeds a members available account balance. |
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| 58 | 72 | | |
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| 59 | 73 | | (b) (1) A credit union shall provide a notice to a member each time the credit union assesses a fee that meets all of the following requirements: |
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| 60 | 74 | | |
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| 61 | 75 | | (A) The notice shall be provided to the member using a communication method designated by the member for receiving this type of notice. |
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| 62 | 76 | | |
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| 63 | 77 | | (B) The notice shall be provided on the same business day the transaction that resulted in the fee occurred, unless it is not feasible to provide the notice that day, in which case the notice shall be provided on the next business day. |
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| 64 | 78 | | |
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| 65 | 79 | | (C) The notice shall contain all of the following: |
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| 66 | 80 | | |
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| 67 | 81 | | (i) The date of the transaction. |
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| 68 | 82 | | |
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| 69 | 83 | | (ii) The type of transaction. |
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| 70 | 84 | | |
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| 71 | 85 | | (iii) Whether the transaction was declined or processed. |
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| 72 | 86 | | |
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| 73 | 87 | | (iv) If applicable, the amount of the overdraft that results from the transaction. |
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| 74 | 88 | | |
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| 75 | 89 | | (v) If applicable, the amount necessary to return the account to a positive balance. |
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| 76 | 90 | | |
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| 77 | 91 | | (vi) If applicable, the consequences of not returning the account to a positive balance within a certain timeframe. |
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| 78 | 92 | | |
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| 79 | 93 | | (vii) If applicable, the amount of time the member has to return the account to a positive balance to avoid the consequences described in clause (vi). |
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| 80 | 94 | | |
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| 81 | 95 | | (2) If the account has more than one accountholder, provision of the notice described in paragraph (1) to any accountholder shall be sufficient. |
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| 82 | 96 | | |
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| 83 | 97 | | (c) Beginning January 1, 2026, a credit union shall not charge a fee exceeding fourteen dollars ($14) or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower. |
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