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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- Comment: Proposed FDIC Survey of Overdraft Loan Programs
Published: Oct 16 2006 Issue: Overdraft Loans
Proposed FDIC Survey of Overdraft Loan Programs
- Require TILA Disclosures For Overdraft Loans
Published: Jun 14 2004 Issue: Overdraft Loans
CRL ask the FED to put overdraft loans under the Truth in Lending Act under the grounds that they are an extension of credit.