The OCC has acknowledged problems with bank overdraft systems but has allowed the banks they regulate to use them.

Center for Responsible Lending president Michael Calhoun testified before the U.S. Senate Banking Committee on November 17, 2009, calling on support for reforming overdraft bank fees. Debit card overdraft fees are unjustifiable.

Congresswoman Carolyn Maloney proposed the Overdraft Protection Act of 2009, which would reform out-of-control bank and credit union overdraft practices. Fees for debit card transactions and other types of overdrafts have reached well over $20 billion per year.

Eric Halperin, director of CRL's DC office, submitted testimony to the Financial Services Committee of the U.S. House on H.R. 3904, the Overdraft Protection Act of 2009. He called the Act a crucial measure for protecting consumers from abusive bank overdraft fees, which have reached $23.7 billion per year. The Federal Reserve Board has failed to address the problem, and reform is urgently needed.

The Center for Responsible Lending strongly supports the FAIR Overdraft Coverage Act as it would represent a major advance in overdraft reform.

The Center for Responsible Lending, along with Consumer Action, Consumer Federation of America, Consumers Union, National Association of Consumer Advocates, National Consumer Law Center (on behalf of its low-income clients), and U.S. PIRG provide the following comments regarding the Federal Reserve Board’s proposed rule to amend Regulation E pursuant to the Electronic Funds Transfer Act.

On March 12, 2009, Representative Carolyn Maloney, Chairwoman of the Financial Institutions Subcommittee (D-NY), Financial Services Committee Chairman Barney Frank (D-MA), and Representatives Ackerman, Miller of North Carolina, Ellison, Speier, Tierney, and Eshoo introduced legislation to protect consumers from abusive overdraft loan programs and stop financial institutions from deliberately manipulating their systems to generate more overdrafts—while preserving the institutions’ ability to cover occasional overdrafts as a courtesy without triggering the Act’s requirements.

Overdraft comment letter

America, Consumers Union, and the National Consumer Law Center, provide the following comments regarding the Federal Reserve Board’s proposed rule to amend Regulation DD pursuant to the Truth in Savings Act (TISA).