Payment Card News

Dollar Destroyer

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New research reveals U.S. banks pilfered their customer accounts by $24 billion last year for checking and debit card mess-ups. The latest survey finds that overdraft fees rose 35% since the start of the “Great Recession”. The Center for Responsible Lending says the recent changes in some overdraft programs do not address some of the most abusive features of the programs and can easily be reversed once the spotlight shifts. Reform of overdraft practices should be set into law–and soon. Policymakers should: require that institutions deny debit card purchases and ATM withdrawals without charge if the funds aren’t there; require that overdraft fees bear some relationship to a lender’s cost of covering a shortfall; limit the number of fees that can be charged to a customer during a year before the institution must enroll the customer in a reasonably priced overdraft product, such as a line of credit, if it wants to keep charging for overdrafts; and consolidate and streamline existing federal consumer protection authority by housing it in one organization: the proposed Consumer Financial Protection Agency. For more information visit: http://www.responsiblelending.org/

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