AFFIL Supports H.R. 3904 and S. 1799
AFFIL and our Partners are sending these letters (House, Senate, both links are PDFs) to the Hill today stating our strong support for overdraft reform. As we blogged about before, Senator Dodd’s bill (S. 1799) takes dramatic new steps to protect consumers from sneaky overdraft loans. In response to his action in the Senate, Rep. Carolyn Maloney introduced companion legislation in the House which is much stronger than the legislation she previously introduced.
Here’s what the bills would do:
- limit the number of overdraft fees institutions can charge per month and per year, without preventing them from offering a lower cost alternative if they want to continue charging for overdrafts;
- require that all overdraft fees be reasonable and proportional to the cost to the institution of processing the transaction;
- require institutions to obtain consumers’ affirmative consent to fee-based overdraft coverage for debit card and ATM transactions;
- clarify that overdraft fees are a finance charge under the Truth in Lending Act;
- require a real-time warning at an ATM before a cash withdrawal would trigger an overdraft fee; and
- prohibit institutions from reordering transactions to maximize fees.