Rep. Maloney On Federal Reserve’s Overdraft Policy Changes

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November 12, 2009 -- WASHINGTON, DC – Rep. Carolyn Maloney (D-NY) today offered this statement on changes to debit-card overdraft rules announced by the Federal Reserve today:

“I'm glad that the Federal Reserve has recognized the need to address outrageous overdraft policies by requiring a strong affirmative opt-in to debit-card overdraft plans, and I commend Chairman Bernanke for taking the regulators in this direction. The Fed’s rule is an endorsement of the need for more overdraft protection for consumers.

“While these rules are a good, solid step forward, they don’t eliminate the need for Congressional action on this issue. The Fed still allows institutions to charge an unlimited quantity of overdraft fees, would do nothing to make fees proportional to the amount of the overdraft, and would not address the manipulation of posting order of charges to accounts. Under the Fed’s new rule, a $5 cup of coffee could still become a $40 cup of coffee after an overdraft fee is added!

“My bill does all that—it caps the quantity of fees at 1 per month or 6 per year, requires that fees be reasonable, and prohibits posting-order manipulation, and includes all transactions, not just debit cards. Those are provisions I believe make for the strongest consumer protections, that’s why Chairman Frank and I have proposed this legislation, and that’s what I believe the House will be passing.”

Background:

H.R. 3904, Maloney’s Overdraft Protection Act of 2009 is co-sponsored by Chairman of the Financial Services Committee Barney Frank and 55 other members, and was the subject of a hearing before the Committee on October 30, 2009.

Source: Rep. Carolyn Maloney