Consumer Group Rallying Support for Overdraft Proposal

   

Posted: Feb 11, 2009

Consumer advocates are urging the public to weigh in on a proposed new government regulation that would revise the ways banks currently handle overdraft fees.

This week, the Center for Responsible Lending noted in a statement that consumers have until March 30 to send comments to the Federal Reserve on the proposed change. Currently, banks can automatically enroll customers in overdraft programs that charge considerable fees for exceeding one's available funds.

Under the proposal before the Federal Reserve, banks would either have to get a customer's permission before signing them up for such a program, or allow customers to opt out after being automatically enrolled.

The Center's website has a page for consumers to send their comments, and there is also a Federal Reserve e-mail address for commenting. The organization is also active on a number of other consumer credit issues, many of which involve predatory lending practices.

"No one likes overdraft fees. Who wants to pay $34 for a $5 hamburger?" said the Center in this week's statement. The organization is backing the opt-in option for consumers and in past statements has said that about 14 percent of bank customers end up paying over 93 percent of all overdraft fees, many of them younger people.