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Press Releases

December 22, 2008
Federal banking regulators yesterday withdrew proposed rules that would have largely failed to protect consumers from astronomically high-cost, unsolicited overdraft loans. The Fed then immediately issued a new proposal containing two alternative approaches. The impact the new proposal will have on abusive fees depends primarily on which approach the Fed ultimately chooses. Consumers pay $17.5 billion per year in overdraft fees that banks charge after routinely allowing consumers to overdraw their accounts by checks, ACH transactions, ATM withdrawals and debit card purchases. This exceeds...
December 19, 2008
Federal regulators issued credit card rules today that take a significant and welcome step to curb some of the industry's most unfair and abusive practices. Unfortunately, implementation of the rules won't take effect for 18 months and, in several key respects, don't go far enough to protect consumers. "Protecting consumers from the costly credit card practices that drain their wallets should always be a priority," said Center for Responsible Lending president Michael Calhoun. "But with a faltering economy showing no sign of improvement, consumers need to be able to hold on to hard-earned...
December 2, 2008
A new survey by the Federal Deposit Insurance Corp. underscores the need for regulatory and congressional action to stop banks from artificially increasing overdrafts without a customer's express consent, a practice that unfairly strips billions of dollars annually from checking accounts. The survey, taken of the banks the FDIC supervises, found that a majority of banks reported automatically enrolling customers into overdraft systems that impose a fee. Rules under consideration by the Federal Reserve Board would require banks to give customers the choice of opting out of the expensive,...
December 1, 2008
The Honorable Barack ObamaPresident-Elect of the United Statesc/o Presidential Transition TeamWashington, DC[Via electronic delivery to John Podesta, Larry Summers, Tim Geithner] Dear President-Elect Obama, We, the undersigned leaders of the nation's foremost consumer, community, civil rights and legal services organizations, write to you to state our urgent concerns regarding the need to guarantee consumer and marketplace protections as a fundamental principle guiding both your nominee selections and policy proposals for agencies that deal with housing and credit policy. Collectively,...
June 25, 2008
Both CRL and the American Banker's Association have surveyed accountholders regarding overdraft preferences. CRL's research found that an overwhelming percentage of consumers (80%) would rather have their debit card transaction denied at the counter than be charged an overdraft fee. The ABA's survey concludes most Americans want unexpected overdrafts to be covered for a fee. CRL and the ABA got different answers because they asked the question differently. The ABA's survey question ignored the distinction between paper checks – which, when denied, typically cost consumers a "non-...
June 18, 2008
Americans 55 and over pay $4.5 billion in fees annually for overdraft loans they haven't asked for and typically don't want, a new study by the Center for Responsible Lending finds. Of that, nearly $1 billion is stripped from people heavily dependent on Social Security income. The new report "Shredded Security: Overdraft practices drain fees from older Americans," shows that overdrafts triggered by debit card use hit people at or approaching retirement age hard even though they use plastic less than younger debt-card holders. The cost – $1.65 in fees for every $1 advanced – reinforces CRL'...
June 18, 2008
Thank you for being with us today. I want to thank my co-author on this report, Peter Smith, who is also a researcher at the Center for Responsible Lending Our nation is in a crisis of debt that reaches beyond the foreclosure epidemic and deep into the pockets of Americans who are living paycheck-to-paycheck. Banks and Credit Unions compound this problem through a problematic practice that strips billions in fees for a so-called service that their customers don't ask for and typically don't want. Today, consumers are typically enrolled automatically into their bank's most expensive...
May 2, 2008
New rules on overdraft practices proposed by federal banking regulators represent a significant acknowledgment that something is wrong with the banking system in the U.S., consumer groups said. Unfortunately, the proposed rules will largely fail to protect the billions of dollars in funds stripped from American bank accounts through excessive overdraft fees every year. Representatives from the Consumer Federation of America, Center for Responsible Lending, Consumers Union, U.S. PIRG, and the National Consumer Law Center are disappointed with new proposals issued by the Office of Thrift...
September 24, 2007
Good morning, I'm Eric Halperin, director of the Center for Responsible Lending's Washington office. I appreciate Congresswoman Maloney's invitation to join her this morning as CRL releases new findings in our ongoing investigation of overdraft lending. Our new report, "Billion Dollar Deal," finds that abusive overdraft loans are draining the checking accounts of young adults to the tune of nearly $1 billion per year. Colleges and universities are contributing to this problem by making deals that give a single bank exclusive access to their students without insisting on protections that...
September 24, 2007
Millions of college students and other young adults aged 18 to 24 have become unwitting participants in overdraft loans that cost them nearly $1 billion a year in fees, a report released today by the nonprofit research group, Center for Responsible Lending, finds. The report, "Billion Dollar Deal," says this age group -- which has been dubbed the "plastic generation" because of their reliance on debit and credit cards – pays over $3 in fees for every $1 borrowed in the form of a debit card overdraft. The resulting billion dollar bonanza for lenders -- often on small-purchase items such as...

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