Overdraft Loans

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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Comment: Proposed Change to NCUA Overdraft Policy, RIN 3133-AF20

Comment: Proposed Change to NCUA Overdraft Policy, RIN 3133-AF20

From the comment letter: NCUA’s proposal, which would permit federal credit unions (FCUs) to keep members’ negative account balances open for longer than the current limit of 45 days, offers no evidence that it will achieve its stated goal -- to provide relief to FCU members. At the same time, the proposal fails to consider the significant risks it poses...
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Comment Letter
Overdraft Fees

Polling Memo: Voters Support Strong Consumer Financial Protections and Tough Regulation of Wall Street

Polling Memo: Voters Support Strong Consumer Financial Protections and Tough Regulation of Wall Street

Ten years after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, with the country again facing an economic crisis, new polling data from Lake Research Partners, commissioned by the Center for Responsible Lending and Americans for Financial Reform shows that voters across all political parties are broadly and intensely supportive of strong consumer financial protections and of...
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Research
Consumer Finance Debt Collection & Settlement Overdraft Fees Student Loans Payday and Other Small Dollar Loans

Concerns with the NCUA Interim Final Rule on Overdraft Policy

Concerns with the NCUA Interim Final Rule on Overdraft Policy

The Center for Responsible Lending (CRL), Self-Help Federal Credit Union, Self-Help Credit Union, and the National Consumer Law Center (on behalf of its low income clients) (NCLC) write to share concerns with the Interim Final Rule on Overdraft Policy that was considered and tabled at NCUA’s May Board meeting. Unfortunately, the proposal fails to offer members relief from overdraft fees...
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Letters to Congress
Overdraft Fees

Overdraft Fees: Banks Must Stop Gouging Consumers During the COVID-19 Crisis

Overdraft Fees: Banks Must Stop Gouging Consumers During the COVID-19 Crisis

A review of 2019 data shows that big banks continue to collect over $11 billion in overdraft related fees each year. Banks engage in a number of abusive practices that combine to drain massive sums from their customers’ checking accounts. The large majority of these fees are shouldered by banks’ most vulnerable customers, often driving them out of the banking...
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Research
Overdraft Fees

Congress Should Halt Outrageous Bank Overdraft Fees During COVID-19 Crisis

Congress Should Halt Outrageous Bank Overdraft Fees During COVID-19 Crisis

Even during the best economic times, overdraft fees are a tremendous drain on working families and often cause irreparable harm. The fees compound into hundreds per year for banks’ most financially distressed account holders and some even end up spending over a thousand dollars in overdraft fees. They drive people out of the banking system altogether, which disproportionately harms people...
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Policy & Legislation
Overdraft Fees

Protections Against Unfair and Abusive Overdraft Fees Should Be Strengthened

Protections Against Unfair and Abusive Overdraft Fees Should Be Strengthened

The 24 undersigned community, consumer, civil rights, and faith groups write regarding the Consumer Financial Protection Bureau (CFPB or the Bureau)’s review of the 2009 Regulation E overdraft opt-in rule under the Regulatory Flexibility Act (RFA). Weakening the opt-in rule in any way is clearly unsupportable; rather, protections against unfair and abusive overdraft fees should be substantially strengthened. Today’s overdraft...
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Comment Letter
Overdraft Fees

Comprehensive Reform of Unfair and Abusive Overdraft Practices Is Badly Needed

Comprehensive Reform of Unfair and Abusive Overdraft Practices Is Badly Needed

The considerations prescribed by the RFA strongly support strengthening protections against overdraft fees on debit card and ATM transactions. More broadly, comprehensive reform of unfair and abusive overdraft practices is badly needed. The RFA sets forth five factors to consider in an RFA review. Consideration of these factors in the opt-in rule context shows clearly that any effort to weaken...
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Comment Letter
Overdraft Fees

Abusive Overdraft Fees Drain Consumers Dry

Abusive Overdraft Fees Drain Consumers Dry

Financial institutions drain billions of dollars annually from their customers through abusive overdraft fee practices. Frequently marketed as a “customer service,” overdraft fees are charged when a customer’s account lacks sufficient funds to cover a transaction and the institution pays the transaction anyway. The institution then repays itself the value of the overdraft transactions and all accompanying fees from the...
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Research
Overdraft Fees

Unfair Market: The State of High-Cost Overdraft Practices in 2017

Unfair Market: The State of High-Cost Overdraft Practices in 2017

According to new data released recently by the FDIC, the largest banks in America collected $11.45 billion in overdraft and non-sufficient funds (NSF) fees from American consumers in 2017, an increase of approximately $10 million over the 2016 total. Overdraft fees often impose a great burden on those already living paycheck to paycheck, struggling to make ends meet. Typically, a...
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Research
Overdraft Fees

Support the Stop Overdraft Profiteering Act of 2018

Support the Stop Overdraft Profiteering Act of 2018

The “Stop Overdraft Profiteering Act of 2018,” introduced by Senators Booker and Brown, would address extremely high-cost overdraft fees financial institutions charge on checking accounts. Banks’ overdraft practices exploit the financially vulnerable, leaving them worse off and driving many from the banking system altogether. The bill would establish reasonable safeguards for checking account holders; restore transparency to the checking account...
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Research
Overdraft Fees
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