Unfair Banking Fees

Photo by Markwr Courtesy of Stock Xpert

Two members of congress have pending proposals for new legislation limiting the amount of fees assessed on bank overdrafts and debit card charges. Senator Chris Dodd has proposed that the Federal Reserve finalize a rule to protect consumers from unfair overdraft fees on bank accounts. He suspects that the fees are new fees or they have been increased and has asked that consumers not be charged without their consent.

Representative Carolyn Maloney has proposed the “Consumer Overdraft Protection Fair Practices Act” which would require the banks to notify customers when a debit card charge would trigger an overdraft fee and give the consumer a chance to cancel the transaction on the spot. She is also proposing that consumers be given an opportunity to consent to overdraft loans as fees and that banks not be allowed to manipulate the sequence of postings of checks and debits.

Both of these proposals are pending before the Federal Reserve Board and are separate from the recent New Credit Card Legislation. As during the past Depressions in the United States, this economic crisis of 2008 has resulted in reforms in the banking industry.