CRL's, Consumer Federation of America and the National Consumer Law Center's comment letter to the OTS regarding the agency's Supplemental Guidance on Overdraft Protection Programs.
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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CRL and other consumer groups provide comment on the Office of Personnel Management's proposed rule regarding garnishment of federal benefits.
CRL and other consumer groups provide comment on the Federal Reserve's opt-in rule and the proposed changes to Regulation DD.
Read our report (PDF) >> Our nation's largest banks extract billions of dollars in fees from their customers each year through abusive overdraft loan programs. Over the last ten years, these programs developed and proliferated under the Office of the Comptroller of the Currency (OCC), the national banks' primary regulator. The OCC recognized problems with the systems early on but has taken no meaningful action to address them. Today, financial institutions routinely approve even the smallest debit card transaction that results in an overdraft. The overdraft programs at the OCC's banks are...
Read our report (PDF) >> Our nation's largest banks extract billions of dollars in fees from their customers each year through abusive overdraft loan programs. Over the last ten years, these programs developed and proliferated under the Office of the Comptroller of the Currency (OCC), the national banks' primary regulator. The OCC recognized problems with the systems early on but has taken no meaningful action to address them. Today, financial institutions routinely approve even the smallest debit card transaction that results in an overdraft. The overdraft programs at the OCC's banks are...
The Federal Reserve issued rules in November 2009 related to bank overdraft practices. These rules are limited and do not address the fundamental problems with today's overdraft systems–- namely, their high cost and the frequency with which fees are charged. Americans pay $23.7 billion per year in overdraft fees, most commonly due to small debit card overdrafts that institutions could easily deny for no fee. These fees hit vulnerable consumers hardest, thrusting them into a cycle of debt and driving some from the banking system altogether. Congresswoman Maloney and Senator Dodd have proposed...
Michael Calhoun, president of the Center for Responsible Lending, testified before the U.S. Senate Committee on Banking, Housing & Urban Affairs on Tuesday, November 17, 2009. Mr. Calhoun offered support for the FAIR Overdraft Protection Act, introduced by Senator Christopher Dodd, as urgent and necessary reform for abusive bank overdraft fees.
U.S. House and Senate proposals promise significant reform Regulators have failed to stop our nation's financial institutions from moving from a policy of discouraging overdrafts to that of encouraging and maximizing overdrafts to drive up fees. The Overdraft Protection Act of 2009, H.R. 3409, introduced by Congresswoman Carolyn Maloney in October 2009, would make meaningful reform with measures similar to the FAIR Overdraft Coverage Act proposed in the U.S. Senate. H.R. 3409 would: require financial institutions to obtain explicit permission from all their customers before enrolling them in a...
Eric Halperin, director of CRL's DC office, submitted testimony to the Financial Services Committee of the U.S. House on H.R. 3904, the Overdraft Protection Act of 2009. He called the Act a crucial measure for protecting consumers from abusive bank overdraft fees, which have reached $23.7 billion per year. The Federal Reserve Board has failed to address the problem, and reform is urgently needed. http://www.house.gov/apps/list/hearing/financialsvcs_dem/hr_102309.shtml