Consumers Urged to Comment on Bank Overdraft Rules Before March 30
Banks can currently enroll consumers in expensive automatic overdraft protection services without active consent. The Federal Reserve is calling for public comments on proposed rules designed to curb this practice.
Columbia, MD, February 19, 2009 --(PR.com)-- Representatives from the National Financial Awareness Network, a Maryland-based personal finance publishing company, are urging consumers to submit comments to the Federal Reserve regarding bank overdraft services before the March 30, 2009, deadline.
The Federal Reserve is considering new rules to regulate how banks add overdraft services. The options under consideration involve two approaches: 1) allow banks to notify account holders of their right to opt-out, and enroll account holders if they ignore the notice; or 2) require banks to first secure permission before enrolling account holders in overdraft protection services.
"No one should be charged for a service he or she didn’t ask for," said John Janney, President of NFAN. "Consumers have a chance to put an end to this practice and reclaim their right to consent and chose the services they pay for."
An FDIC study published in November 2008, revealed that banks charge account holders $17.5 billion in automatic overdraft protection fees that range from $10 to $38 per incident. The study also found that 75.1 percent of banks automatically enrolled their customers in automatic overdraft protection, in which the bank loans the account holder funds to cover transactions over the account balance. More than 94.7 percent of banks required account holders to actively opt-in for less expensive linked-account overdraft programs, in which the account holder covers transactions through funds in other accounts.
"The more consumers who write in and express their concern for costly automatic enrollment for overdraft protections, the greater chance that regulators will require banks to get explicit permission before charging fees for a service many consumers don't realize they have," said Maggie Beetz, Senior Financial Literacy Writer at NFAN. "These overdraft protection programs are loans, and it should be clear in our current economic condition that consumers should fully understand and consent to loans."
Consumers can submit their comments to regs.comments@federalreserve.gov with the subject line "Docket No. R-1343" before the March 30, 2008, deadline. Comments, including your name and contact information, become part of the federal public record and may be made available to the public.
About NFAN
The National Financial Awareness Network is a Maryland-based personal finance publishing company that offers educational products and services, such as the popular Do-It-Yourself Debt Settlement Kit, Debt Relief University, Help For Debtors online support forum and their How to Get Great Credit e-book. For more information, please visit the NFAN website at nfan.com.
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The Federal Reserve is considering new rules to regulate how banks add overdraft services. The options under consideration involve two approaches: 1) allow banks to notify account holders of their right to opt-out, and enroll account holders if they ignore the notice; or 2) require banks to first secure permission before enrolling account holders in overdraft protection services.
"No one should be charged for a service he or she didn’t ask for," said John Janney, President of NFAN. "Consumers have a chance to put an end to this practice and reclaim their right to consent and chose the services they pay for."
An FDIC study published in November 2008, revealed that banks charge account holders $17.5 billion in automatic overdraft protection fees that range from $10 to $38 per incident. The study also found that 75.1 percent of banks automatically enrolled their customers in automatic overdraft protection, in which the bank loans the account holder funds to cover transactions over the account balance. More than 94.7 percent of banks required account holders to actively opt-in for less expensive linked-account overdraft programs, in which the account holder covers transactions through funds in other accounts.
"The more consumers who write in and express their concern for costly automatic enrollment for overdraft protections, the greater chance that regulators will require banks to get explicit permission before charging fees for a service many consumers don't realize they have," said Maggie Beetz, Senior Financial Literacy Writer at NFAN. "These overdraft protection programs are loans, and it should be clear in our current economic condition that consumers should fully understand and consent to loans."
Consumers can submit their comments to regs.comments@federalreserve.gov with the subject line "Docket No. R-1343" before the March 30, 2008, deadline. Comments, including your name and contact information, become part of the federal public record and may be made available to the public.
About NFAN
The National Financial Awareness Network is a Maryland-based personal finance publishing company that offers educational products and services, such as the popular Do-It-Yourself Debt Settlement Kit, Debt Relief University, Help For Debtors online support forum and their How to Get Great Credit e-book. For more information, please visit the NFAN website at nfan.com.
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Contact
National Financial Awareness Network, Inc.
John Janney
1-877-259-6968
http://www.nfan.com/
John Janney
1-877-259-6968
http://www.nfan.com/
Contact
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