Statement of Mike Calhoun, President, Center for Responsible Lending


The Center for Responsible Lending commends Bank of America for its decision to stop charging overdraft fees on debit card purchases. With this change, Bank of America—which issues more debit cards than any other bank— joins another banking giant, Citibank, in practicing responsible debit card overdraft policies.


Most other large banks typically charge a $35 fee on an average debit card overdraft of only $17—an exorbitant cost for credit that the bank automatically repays itself only days later from the customer's next deposit. As recently as 2004, the large majority of financial institutions denied debit card and ATM transactions and charged no fee when there was not enough money in the account. Today, overdraft fees on debit card and ATM transaction account for about half of all overdraft fees, which total nearly $24 billion annually

Bank of America's decision will allow millions more Americans to use their debit cards without fear of being driven into high-cost debt. As the largest debit card issuer, Bank of America stands to lose the most in overdraft fees by stopping this unfair practice. Other banks should promptly follow suit.

CRL also urges the Federal Reserve, which has the authority to address overdraft fees, to limit the amount and number of these fees. Despite knowing for years of the problems these fees cause, the Fed recently issued a rule requiring only that banks get customers to sign a consent form authorizing the institution to charge unlimited fees on debit card transactions. Many banks are already engaged in scare campaigns to get customers to sign these forms.

The Fed's failure to fully address overdraft abuses means that charging these high fees—which can add up to hundreds of dollars a day for a customer—remains a widespread practice throughout most of the industry.

Unfair financial practices in this and other areas underscore the need for Congress to enact an independent consumer financial protection agency charged with setting fair rules for all financial service providers.

For more information about debit card overdraft charges, please visit

For more information: Kathleen Day at (202) 349-1871 or; Ginna Green at (510) 379-5513 or; or Charlene Crowell at (919) 313-8523 or

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