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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Neglect and Inaction: An Analysis of Federal Banking Regulators’ Failure to Enforce Consumer Protections

Neglect and Inaction: An Analysis of Federal Banking Regulators’ Failure to Enforce Consumer Protections

Read a condensed version of this report (PDF) Introduction For too long the responsibility for protecting consumers has been fragmented among various federal regulators whose primary focus was the safety and soundness of the banking system. Consumer protection often went neglected, if anything, an afterthought or a box to check. Federal regulators' failure to restrain abuses that led to today's...
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Research
Mortgage Lending Overdraft Fees

Financial Reform that Protects Consumers

Financial Reform that Protects Consumers

Consumer Financial Protection Agency (CFPA) In recent years, federal bank regulators looked the other way as tricky financial products with hidden costs and fees crowded out responsible loans. Dangerous products have stifled true innovation, depriving consumers of meaningful choices and leading the nation into today's financial crisis. We don't always need more regulation, but rather more effective regulation that is...
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Mortgage Lending Overdraft Fees

Financial Reform that Protects Consumers

Financial Reform that Protects Consumers

Consumer Financial Protection Agency (CFPA) In recent years, federal bank regulators looked the other way as tricky financial products with hidden costs and fees crowded out responsible loans. Dangerous products have stifled true innovation, depriving consumers of meaningful choices and leading the nation into today's financial crisis. We don't always need more regulation, but rather more effective regulation that is...
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Research
Mortgage Lending Overdraft Fees

Regulatory Restructuring: Enhancing Consumer Financial Products Regulation

Regulatory Restructuring: Enhancing Consumer Financial Products Regulation

EXCERPT Mr. Chairman, Ranking Member Bachus, members of the Committee: Thank you for inviting the Center for Responsible Lending to discuss consumer financial products reform – a fundamental component of the effort to modernize and repair our financial regulatory system. Over the past decade, federal bank regulators looked the other way as responsible loans were crowded out of the market...
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Research
Mortgage Lending Overdraft Fees

Six Principles for Real Reform: Balancing Bank Safety and Sensible Lending

Six Principles for Real Reform: Balancing Bank Safety and Sensible Lending

Reckless lending practices that became rampant in recent years have devastated the economy, costing Americans billions of dollars in lost wealth and resulting in the weakest economy since the great Depression. Unfortunately, the regulators overseeing bank safety and consumer protections fell down on the job. Congress has taken a number of actions to investigate the causes of the financial meltdown...
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Research
Mortgage Lending Overdraft Fees

Testimony of Kathleen Keest In Regards To HR 2309

Testimony of Kathleen Keest In Regards To HR 2309

Too often in the recent past, discussions over consumer protection regulation have been portrayed as a zero-sum game, where consumer protections are assumed to be a drag on the market, and must come at the expense of business. But that is a false dichotomy. Businesses have a symbiotic relationship with their customers. In the end, the health of the business...
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Testimony
Overdraft Fees

Quick Facts on Overdraft Loans

Quick Facts on Overdraft Loans

These findings were obtained primarily from CRL research on overdraft loans. Total costs vs. funds extended: Total cost per year consumers pay in overdraft fees: $ 23.7 billion. Total funds extended by institutions to cover consumers' overdrafts: $ 21.3 billion. This means consumers had to repay $45 billion for $21.3 billion in very short-term credit. Mostly debit cards and small...
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Research
Overdraft Fees

Comments on Regulation E—Overdraft Practices

Comments on Regulation E—Overdraft Practices

The Center for Responsible Lending, along with Consumer Action, Consumer Federation of America, Consumers Union, National Association of Consumer Advocates, National Consumer Law Center (on behalf of its low-income clients), and U.S. PIRG provide the following comments regarding the Federal Reserve Board's proposed rule to amend Regulation E pursuant to the Electronic Funds Transfer Act. Summary of recommendations: Revisit the...
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Comment Letter
Overdraft Fees

Key protections in H.R. 1456 - Consumer Overdraft Protection Fair Practices Act

Key protections in H.R. 1456 - Consumer Overdraft Protection Fair Practices Act

Consumers are being hit with fees amounting to triple-digit interest rates on loans they did not ask for—and in many cases cannot afford—when they overdraw their bank accounts through checks, electronic transfers, debit card purchases, and ATM withdrawals. This is possible because the Federal Reserve Board has refused to close a loophole in the rules implementing the Truth in Lending...
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Research
Overdraft Fees

Overdraft Fees and Opting In Survey

Overdraft Fees and Opting In Survey

The Federal Reserve Board is considering implementing a new rule that would require financial institutions to get explicit permission before enrolling their account holders in an overdraft system that automatically approves debit card and ATM transactions, and assesses an average $34 fee if there is a negative balance in the account. A Center for Responsible Lending survey conducted by market...
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Research
Overdraft Fees
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