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.
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- Guidance to OTS on Overdraft Protection Programs
Published: Jun 28 2010 Issue: Overdraft Loans
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.
- CRL Comment Letter on Garnishment of Federal Benefits
Published: Jun 18 2010 Issue: Overdraft Loans
CRL and other consumer groups provide comment on the Office of Personnel Management's proposed rule regarding garnishment of federal benefits.
- CRL and Other Groups Comment on Clarifications to Fed's Opt-In Rule
Published: Mar 30 2010 Issue: Overdraft Loans
CRL and other consumer groups provide comment on the Federal Reserve’s opt-in rule and the proposed changes to Regulation DD.
- National Bank Regulator Enabled Overdraft Abuses
Published: Feb 24 2010 Issue: Overdraft Loans
The OCC has acknowledged problems with bank overdraft systems but has allowed the banks they regulate to use them.
- Congressional Proposal Would Curb Overdraft Abuses; Fed’s Rules Fall Far Short
Published: Feb 2 2010 Issue: Overdraft Loans
Chart comparing Federal Reserve rules and proposed legislation to curb overdraft abuses.