National Bank Regulator Enabled Overdraft Abuses

Published: February 24, 2010

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Our nation's largest banks extract billions of dollars in fees from their customers each year through abusive overdraft loan programs.  Over the last ten years, these programs developed and proliferated under the Office of the Comptroller of the Currency (OCC), the national banks' primary regulator.  The OCC recognized problems with the systems early on but has taken no meaningful action to address them.  Today, financial institutions routinely approve even the smallest debit card transaction that results in an overdraft.  The overdraft programs at the OCC's banks are among the worst in the industry, and the OCC should stop the practices now.

The problem overdraft practices at OCC-regulated national banks include:

  • Automatically enrolling customers in the most expensive overdraft program they offer,
  • Covering and charging for debit card and ATM overdrafts that could easily be denied for no fee,
  • Posting transactions in an order that maximizes overdraft fees,
  • Charging additional fees if customer remains overdrawn for more than a few days (i.e., "sustained overdraft fees"),
  • Allowing multiple fees to be charged per day, and
  • Charging fees that can be several times greater than the amount overdrawn.