A rule issued by Federal Reserve Board that took effect in 2010 requires that banks get explicit permission from their customers before enrolling them in high-cost overdraft systems that cover debits and ATM transactions. They received thousands of comments from consumers asking for the stronger of two proposed rules, which is a step in the right direction, but fails to address abuses in systems when customers do opt in. The FDIC has addressed one of the most egregious practices, re-ordering transactions from highest to lowest in order to charge more overdraft fees, but its guidance applies only to the state-chartered banks it regulates. The OCC and the Fed should stop re-ordering as well, and all bank regulators should take steps to keep financial institutions from assessing unfair and excessive overdraft fees.
Search Overdraft Loans - Policy & Legislation - Regulators
Browse Overdraft Loans - Policy & Legislation - Regulators
- Joint Letter Urging OCC to Curb Overdraft Abuse
October 13, 2010
The Center for Responsible Lender added its signature to a letter from national consumer organizations asking the Office of the Comptroller of the Currency (OCC) to adopt stricter overdraft guidelines. Practices that need to be addressed include enrolling customers in fee-based overdraft when they qualify for much lower-cost coverage, charging excessive fees in amount and frequency, re-ordering transactions to maximize fees and deceptive solicitations.
- Comment Letter on FDIC's Proposed Overdraft Guidance
September 27, 2010
CRL and other consumer advocates filed a comment letter with the FDIC supporting most aspects of the agency's proposed guidance on overdraft. The groups also made recommendations on how the agency could go even further in protecting consumers from excessive overdraft fees.
- Joint Letter in Support of FDIC Overdraft Proposals September 2010
September 27, 2010
CRL and a cross-section of civil rights, labor, consumer, housing, community, business, and sustainable and responsible investor groups sent a joint letter to the FDIC expressing support for bringing attention to abusive overdraft practices. The groups support the agency’s common-sense recommendations for actions banks should take to treat their customers more fairly while offering recommendations for how the FDIC could further address its banks deceptive practices.
- Banks Target, Mislead Consumers As Overdraft Deadline Nears
August 5, 2010
Banks want you to allow your checking account to be subject to overdraft fees from debit card purchases.
- Guidance to OTS on Overdraft Protection Programs
June 28, 2010
CRL’s, Consumer Federation of America and the National Consumer Law Center’s comment letter to the OTS regarding the agency’s Supplemental Guidance on Overdraft Protection Programs.