Rep Carolyn B. Maloney [ NY-12] calls on Congress to stand up for consumers and pass the Overdraft Protection Act. The Overdraft Protection Act of 2013 amends the Truth in Lending Act to prohibit a depository institution from engaging in unfair or deceptive acts or practices in connection with overdraft coverage, or in acts designed to evade the provisions of this Act. The bill sponsored by Rep Maloney was introduced on March 19, 2013, with 45 cosponsors.
The last major action on the bill was at its introduction, where it was referred to the House Committee on Financial Services. Since then no official action has moved the bill closer to a larger discussion in the full House or Senate. As stated in a June press release, Congresswoman Maloney is compelled once again to demand that Congress stand up for consumers and pass her Overdraft Protection Act bill.
New in the Act:
- Requirement to disclose that if a consumer does not opt-in to such overdraft coverage: (1) the consumer’s transaction may be declined if there are insufficient funds in the related transaction account, and (2) the consumer will not be charged a fee if such transaction is declined.
- Consumer consent to overdraft coverage fees in connection with use of an automatic teller machine (ATM) or point of sale transaction.
- Requirement to disclose (1) in periodic statements for any transaction account that has an overdraft coverage program feature, (2) provide prompt notification of the account’s overdraft status, and (3) the overdraft coverage fee as an annual percentage rate (APR), in order to permit consumers to compare meaningfully the overdraft coverage to alternative overdraft options and other sources of credit.
- Prescribes overdraft coverage fee limits.
- Prohibits an overdraft coverage fee solely from a debit hold amount that exceeds the actual dollar amount of the transaction.
- Provide consumers who have not consented to participate in an overdraft with the same terms as consumers who have consented
- Prohibits non-sufficient fund fee for any ATM or debit card transaction.
- Prohibits a depository institution from reporting negative information regarding consumer use of overdraft coverage when payments are under the terms of an overdraft coverage program.
- CFPB to study whether consumers are being subjected to abusive practices with respect to prepaid card overdraft coverage.
Read More: Press Release