League Pens Letter to Sen. Booker, Outlines CU Opposition to his Overdraft Bill

NJCUL President/CEO David Frankil sent a letter today to Sen. Cory Booker (D-NJ) voicing credit union opposition to a bill he and Senate Banking Committee Ranking Member Sherrod Brown (D-OH) have introduced, The Stop Overdraft Profiteering Act of 2018 (S.3343).

The bill would amend the Truth in Lending Act to limit overdraft fees and regulate the marketing and provision of overdraft coverage programs.

The legislation would:

  • Prohibit overdraft fees on debit card transactions and ATM withdrawals;
  • Prohibit financial institutions from charging more than one overdraft fee per month and no more than six overdraft fees in any single calendar year for check and recurring bill payment overdrafts;
  • Limit check and recurring bill payment overdraft fees to an amount that is reasonable and proportional to the financial institution’s costs in providing the overdraft coverage;
  • Mandate a three-day waiting period between when an individual opens a new account and when a financial institution may offer overdraft protection;
  • Mandate that depository institutions post transactions in a manner that minimizes overdraft and non-sufficient fund fees; and
  • Increase other consumer disclosures related to overdraft coverage programs.

If enacted, it would apply to all depository institutions, including credit unions.

The legislation has been endorsed by a long list of liberal advocacy groups, including the Center for Responsible Lending, National Consumer Law Center, Americans for Financial Reform, and Consumer Federation of America.