Martin & Jones, PLLC
Call today for a Free consultation.
800-662-1234

Federal Legislation Proposed to Curb Overdraft Fee Abuses

Americans pay $23.7 billion per year in overdraft fees, most of which are related to small debit card overdrafts that financial institutions could easily deny without imposing any fees. As the Center for Responsible Lending has noted: "These fees hit vulnerable consumers hardest, thrusting them into a cycle of debt and driving some from the banking system altogether." The Federal Reserve Board issued rules in November 2009 which were intended to rein in bank overdraft practices. However, many consumer advocates and some members of Congress contend the Federal Reserve's rules did not go far enough.

Legislation is currently pending before Congress which is intended to comprehensively address what are seen as continuing problems with bank overdraft programs. The pending legislation (H.R. 3904, S. 1799) would accomplish the following: (1) there would be a limit on the frequency of permissible overdraft charges to six per year and one per month; (2) overdraft fees would need be reasonable in amount and proportional to the bank's actual cost; (3) there would be required real-time warning of a pending overdraft at all ATMs; (4) institutions would be prohibited from continuing to post purchases in order from largest to smallest so as to maximize overdraft fees; and (5) banks would be precluded from charging multiple overdraft fees for a single overdraft. The proposed legislation would also require a cost of credit disclosure for overdraft fees, consistent with the Truth in Lending Act (TILA), so consumers would have a basis upon which to compare the cost of overdraft fees to other, less expensive forms of credit.

No Comments

Leave a comment
Comment Information

Testimonials

Contact US Get Help Now

Send us an email or call us today at 800-662-1234 to speak with an attorney about your claim or to arrange a free consultation. It costs nothing to call and there is no obligation. In fact, we are not paid until your case is resolved. Se habla español. If you are unable to travel to one of our offices in Raleigh, Durham and Wilmington, we will meet with you at your location.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Raleigh Office
410 Glenwood Avenue, Suite 200
Raleigh, NC 27603

Toll Free: 800-662-1234
Phone: 919-821-0005
Raleigh Law Office Map

Wilmington Office
1213 Culbreth Drive, Suite 121
Wilmington, NC 28405

Toll Free: 800-662-1234
Phone: 910-256-4005
Wilmington Law Office Map

Durham Office
302 East Pettigrew Street, Suite 330
Durham, NC 27701

Toll Free: 800-662-1234
Phone: 919-544-3000
Durham Law Office Map