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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High-Cost and Hidden from View: The $10 Billion Overdraft Loan Market
This report quantifies the fees that people with checking accounts are now paying for high-cost, short-term overdraft loans. Many people are finding themselves with overdraft loans they never asked for, do not want, and cannot afford. Federal regulators have failed to protect these customers. The Center for Responsible Lending finds that borrowers are paying more than $10 billion per year...
Require TILA Disclosures For Overdraft Loans
Overdraft loan programs (also called "bounced-check protection" or "courtesy overdraft protection") allow customers to incur debt when their checking account goes into a negative balance. Borrowers are charged a flat-fee per check or non-check overdraft and must bring their account to a positive balance within a short time period. The institutions that operate the programs do not disclose an annual...