Payment Card News

Out of Balance

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A new survey has found that consumers paid about $17.5 billion in fees for $15.8 billion in abusive overdraft loans. In addition, the report finds that debit card overdrafts are now the single largest source of overdraft fees. The non-profit Center for Responsible Lending research also identified several unfair bank practices including the posting of charges against a checking account quickly while intentionally delaying the posting of deposits; lowering account balances by re-ordering debits to clear higher-dollar items first; and failing to warn a customer during debit card point-of-sale or ATM transactions if they are about to overdraw their account so that they may cancel the transaction if they choose. CRL is asking Congress to pass HR 946, sponsored by Rep. Carolyn Maloney (D-NY) and Barney Frank (D-MA). The bill would make abusive overdraft loans subject to “Truth-in-Lending Act” interest rate disclosures, as well as requiring written consent from account holders before banks could enroll them in these systems. It would also prohibit manipulations designed to increase overdrafts, and would require banks and credit unions to warn their customers before authorizing an overdraft. For more information visit: “http://www.responsiblelending.org”:http://www.responsiblelending.org

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