A proposed rule issued by the Federal Reserve Board to curb some of the industry's worst practices takes one step forward by eliminating overdraft loans resulting from debit holds, but fails to require that consumers self-enroll based on their account preferences.

Specifically, the Federal Reserve would require banks to offer an opt-out right for overdraft loan programs and to provide consumers with notice and an opportunity to opt out of the payment of overdrafts, once before an overdraft fee or charge is assessed and again during any statement period in which an overdraft fee was assessed.

We believe this is insufficient and have formally requested that the Federal Reserve reconsider.

The proposal would also forbid overdraft loan charges in cases where an account is overdrawn due to a debit hold.For consumers who are living paycheck to paycheck and are often subject to high overdraft fees, this changes would, at the very least, make sure overdraft fees are levied as a result of consumer behavior and not a bank's internal processing procedures. 

The complete comment letter is available below. 

Comment letter to Federal Reserve requesting that consumers be required to opt in to overdraft loan programs, rather than opt out

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