And guess what! That's a GOOD thing Good news! Bank of America has announced it will stop its costly, automatic approval of debit card and ATM overdrafts. Bank of America joins Citibank in covering debit card and ATM overdrafts only if their customers have signed up for more reasonably priced coverage, by linking their savings or line of credit to...
Excessive overdraft fees charged by banks and credit unions can cause devastation for financially vulnerable families. Many lenders used predatory policies and practices designed to repeatedly extract excessive fees from customers who could least afford them. Overdraft fees are a leading cause of financial institutions closing a consumer’s account and reentry into the banking system often is exceedingly difficult, increasing the financial insecurity of many consumers. CRL advocates for legislators and regulators to rein in the size and frequency of these fees. We estimate that the savings from these fee eliminations will be between $3 billion to $4 billion for working families.
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Payday loans create a cycle of debt that diminishes the income of vulnerable households Marketed as short-term relief for a cash crunch, payday loans carry annual interest rates of 400 percent and are designed to catch working people – or those with a steady source of income such as Social Security or a disability check – in a long-term debt...
Read the executive summary (pdf) >> Unfair bank practices threaten to shred the safety net of Social Security for older Americans New CRL research finds that unauthorized overdrafts strip fees from Americans 55 and older at the level of $4.5 billion per year. Nearly $1 billion of that comes from people who are heavily dependent on Social Security income. CRL's...
In May 2008, the Federal Reserve Board, the Office of Thrift Supervision, and the National Credit Union Administration issued a joint proposed rule governing overdrafts. The rule would allow financial institutions to continue giving customers expensive loans even though they never asked for them. Research shows that the vast majority of bank customers are automatically signed up to receive costly...
A new CRL survey finds respondents prefer that their bank or credit union deny debit card purchases that are not covered by the funds in their checking account, whether their purchase is for $5, $20 or $40. More consumers are enrolled in the most expensive option than any other option for covering overdrafts, the survey also finds.
OVERDRAFT LOAN = HIGH-COST NO-CHOICE CREDIT Protection? More like small loans with abusive terms. Banks and credit unions now enroll many of their account holders into the most expensive option for covering overdrafts—an option customers generally don't want and didn't ask for—and leave them without the information they need to protect their funds. Under these systems, financial institutions routinely approve...