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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- Quick Facts on Overdraft Loans
April 9, 2009
Brief facts about overdraft loans, largely derived from CRL research
- Comments on Regulation E—Overdraft Practices
March 30, 2009
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.
- Comment: Proposed Rule Regarding Unfair or Deceptive Acts or Practices – Overdraft Practices
August 4, 2008
Overdraft comment letter
- Comments on proposed Regulation DD amendments re Overdraft Lending
July 18, 2008
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).
- Require opt-in for overdraft
June 13, 2008
CRL discusses importance of requiring banks to get explicit permission from customers before enrolling them in high-cost overdraft.