Overdraft Opt-In Savings

Published: June 23, 2011

Better Overdraft Policies Put Money Back In Consumers' Pockets

Regulators Must Stop Remaining Overdraft Abuses

A new study by Market Rates Insight finds that Americans saved $1.6 billion in overdraft fees in 2010 after the “opt-in” rule took effect last summer. Once banks were required to get explicit permission before approving debit card overdrafts for a fee, most Americans said, "No, thanks."  Since then, even during these tough economic times, customers' account balances have increased, while service fees have decreased.

Unfortunately, abusive overdraft practices that cost tens of billions per year remain unchecked. For example, banks can still manipulate their customers’ accounts, re-ordering transactions to drive up overdraft fees, and repay themselves directly from their customers’ direct deposited federal benefits.  And fees still average approximately $35 a piece, even on small debit card transactions. 

Recently proposed guidance by the Office of the Comptroller of the Currency (OCC), a major bank regulator, does little more than legitimize some of these abuses. Americans need the Consumer Financial Protection Bureau (CFPB) to ensure they can do their banking without fear of financial abuse.