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Press Releases

October 15, 2010
The American Bankers Association and industry consultants claim surveys show customers have "opted in" to high-fee debit card overdraft coverage because they want this service. But these surveys likely only show the success of aggressive, deceptive marketing campaigns to steer customers into bad products, not true customer preference. Industry-sponsored survey results would be more credible if banks and credit unions actually gave customers the information they need to make informed choices. But instead, too many banks and credit unions do the following: Do NOT tell customers they...
October 13, 2010
The Honorable John Walsh Acting Comptroller Office of the Comptroller of the Currency 250 E Street, SW Washington, DC 20219-001 Dear Acting Comptroller Walsh: As banks continue their campaigns to persuade consumers to agree to pay steep fees for debit card overdrafts, we urge the Office of Comptroller of the Currency to adopt stricter guidance that effectively requires banks to use fair overdraft practices and fully inform consumers. In the past several months, our organizations filed comments in dockets opened by the Office of Thrift Supervision (OTS)[i] and the FDIC[ii] to update and...
August 11, 2010
"American families, especially those most vulnerable financially, could save millions of dollars a year in costly overdraft fees if guidelines the FDIC proposed today are adopted. The guidelines would encourage the banks the FDIC oversees to offer customers lower-cost overdraft alternatives rather than charge unlimited high-cost overdraft fees—as many banks do, even on small debit card transactions. Under the proposal, a bank would contact a customer who incurs six overdraft fees within 12 months and offer—and explain—less costly options. The bank would be encouraged to provide the...
August 5, 2010
As the August 15th deadline nears for bank and credit union customers to opt in to high-cost overdraft programs, a new CRL analysis finds these firms market most aggressively and often misleadingly to their most vulnerable customers. Banks target these customers because they likely live on the edge financially and therefore are most likely to repeatedly overdraw accounts. To induce these customers to accept overdraft coverage, many marketing campaigns use scare tactics or incomplete information. For example, they fail to emphasize customers can have debit card transactions declined at no cost...
June 30, 2010
Washington, D.C.— Starting tomorrow, banks must obtain permission from new customers before enrolling them in costly overdraft coverage for debit-card transactions. The Federal Reserve Board's new rule improves the status quo but still falls far short of what's needed: Banks should not be allowed to impose exorbitant charges that bear no reasonable connection to the overdraft amount or a lender's cost for making the loan. Banks also continue to pile on overdraft charges, including by manipulating transactions to maximize the number of fees they hit customers with each day. In...
February 24, 2010
A key federal regulator for years has let national banks engage in lending practices that the regulator itself admits harm consumers and lenders, according to two new reports from the Center for Responsible Lending. (For the full reports go to: http://qa.crl.w.lmdagency.net/research-publication/mainstream-banks-making-payday-loans and http://www.responsiblelending.org/research-publication/national-bank-regulator-enabled-overdraft-abuses) The reports focus on two of many areas in which the regulator—the Office of the Comptroller of the Currency, or OCC—has fallen down on the job: payday...
December 11, 2009
Statement from Michael Calhoun President of the Center for Responsible Lending Washington, D.C. – "We are very pleased the U.S. House of Representatives has taken an important step toward restoring our country's financial stability by voting to pass the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173). The bill would provide consumers with significant protections from the industry practices that dismantled our economy and those of countries around the world. We commend the House for this vote to protect families and small business from unfair, unsafe financial...
November 12, 2009
"The Federal Reserve Board's action today on debit card overdraft fees legitimizes an abusive product without providing any substantive protections for bank customers. We appreciate that the Fed chose to implement the strongest overdraft reform rule it was considering, namely requiring banks and credit unions to ask new and existing customers before charging overdraft fees on debit card transactions. But this improvement is undermined by the Fed's failure to propose or enact necessary safeguards against a host of unfair practices. The Fed acknowledges in its new rule that the fees...
November 10, 2009
Statement by Mike Calhoun, President of the Center for Responsible Lending: "The draft legislation to create a Consumer Financial Protection Agency unveiled today by Senate Banking Committee Chairman Christopher Dodd is an essential component of urgently needed financial reform. Unfortunately, the banking lobby will exert intense pressure to weaken the bill by carving out special exemptions for some lenders and also by hobbling states' ability to address lending issues in their own jurisdictions. Committee members will need to resist the banking lobby's influence if they are to craft...
October 30, 2009
Congressional proposals to rein in abusive overdraft practices are long overdue, Center for Responsible Lending executive Eric Halperin told the House Financial Services Committee today. Halperin, who is director of CRL's Washington office, gave full support to legislation aimed at reforming bank overdraft programs, which cost consumers $23.7 billion last year and are among the most predatory lending products on the market. "Charging people a $35 fee for a small, debit card transaction is unacceptable," said Halperin, director of CRL's Washington office. "It doesn't save them bounced...

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