CRL joined with CFA and NCLC to provide the CFPB (Consumer Financial Protection Bureau) with documentation of bank overdraft practices and their impact on consumers. The CFPB should stop banks from reordering transactions and should prohibit overdraft fees on debit card transactions, which can easily be declined at no cost.
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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The Center for Responsible Lending commented on Capital One's proposed acquisistion of ING Bank at a public meeting held by Federal Reserve on September 20, 2011. Summary CRL has done extensive research and policy work addressing checking account overdraft practices that cause significant harm to bank customers. We are concerned that Capital One's current overdraft practices are out of step...
Consumer groups fear OCC proposed guidance may legitimize and facilitate the spread of payday lending by national banks, and banks would continue abusive overdraft practices—harming bank customers, undermining state payday loan laws, and weakening the long-term safety and soundness of financial institutions.
CRL supports the principles laid out in the OCC's proposed guidance on overdraft and bank payday loans, but hopes the OCC will dramatically strengthen its guidance to address existing problems and to avoid inadverdently entrenching abuses. Among our recommendations, CRL urges the OCC to act quickly and decisively to stop payday lending before it becomes pervasive among banks. CRL also...
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...
Survey finds low opt-in rate, high number of misperceptions Download the complete survey (PDF) >> When it came to convincing customers to opt in to high-cost overdraft coverage, it was as if the banks rigged the election but still lost the vote. A Center for Responsible Lending survey indicates that most consumers do not want high-cost overdraft coverage for their...
Download this ruling (PDF) >> An 11th Circuit Court held that an arbitration clause was unenforceable in a suit charging BB&T with reordering debit card transactions to boost bank overdraft fees.
And guess what! That's a GOOD thing. Bank of America and Citibank cover 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 their checking account. Q: Why is this A GOOD THING? No more surprise high-cost overdrafts at the ATM or checkout for...
The Center for Responsible Lender added its signature to a letter from national consumer organizations asking the Office of the Comptroller of the Currency (OCC) to adopt stricter overdraft guidelines. Practices that need to be addressed include enrolling customers in fee-based overdraft when they qualify for much lower-cost coverage, charging excessive fees in amount and frequency, re-ordering transactions to maximize...
Download the joint letter >> CRL and a cross-section of civil rights, labor, consumer, housing, community, business, and sustainable and responsible investor groups sent a joint letter to the FDIC expressing support for bringing attention to abusive overdraft practices. The groups support the agency's common-sense recommendations for actions banks should take to treat their customers more fairly while offering recommendations...