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Branch Employees Often Give False Info about Overdraft Fees: Consumer Groups (American Banker)

Only 14.3% of customers at big banks had overdraft coverage in 2011 and 2012, according to the Consumer Financial Protection Bureau.

But for the minority of consumers who do opt in, overdraft fees can be enormously expensive. Around 8% of consumers paid overdraft fees at least 10 times per year, which cost them an average of $380 annually, the CFPB says.

Bank overdraft programs cause widespread confusion, new report shows

Written by Dory Rand on August 4, 2014 - 3:12pm

Read the report

The four organizations conducted 64 mystery shopping visits at 39 bank branches in Chicago, Durham, New York City, and Oakland, including Bank of America, BB&T, BMOHarris, Capital One, Chase, Citi, SunTrust, and Wells Fargo. In Chicago, mystery shoppers visited Bank of America, BMO Harris, Chase, and Citi.

How Banks Sell Overdraft: Results of Overdraft Mystery Shopping in Four Key States

Written by Woodstock Institute, California Reinvestment Coalition, New Economy Project, Reinvestment Partners on August 1, 2014 - 10:53am

Four organizations—California Reinvestment Coalition of Oakland, CA; New Economy Project of New York, NY; Reinvestment Partners of Durham, NC; and Woodstock Institute of Chicago, IL—conducted 64 mystery shopping visits at 39 bank branches in Chicago, Durham, New York City, and Oakland. The four largest banks by deposit size in each city or state (California) were selected, including Bank of America, BB&T, BMO Harris, Capital One, Citibank, JPMorgan Chase, SunTrust, Union Bank, and Wells Fargo.

Tell Rep. Rush to drop support for pro-payday lending bill

In fact, the bill would carve lenders peddling harmful financial products online, like payday and car title loans, out of hard-fought state and federal consumer protections. Disappointingly, Rep. Bobby Rush (D-IL) is a co-sponsor of this bill, which would strip wealth from consumers who can least afford it.

Comment letter to the FDIC and OCC regarding guidance on deposit advance products

This comment letter supports proposed guidance from the OCC and FDIC regarding bank deposit advance products, which are functionally equivalent to payday loans. The letter also recommends that the OCC and FDIC institute an annual percentage rate cap, require APR disclosure, prevent mandatory automatic repayment, and strongly enforce the guidance. Eighteen organizations signed on to the letter.

Sign on to support proposed rules on bank payday loans

As we mentioned earlier this week, two federal regulators have released proposed rules that would put an end to the worst practices of payday lending by banks. We need to let regulators know that we support their changes! Comments are due next week Thursday, May 30. There are two ways you can make your voice heard on this issue.

Comment today on CRA guidance

The regulators released proposed changes to their documents that implement CRA (called Interagency Questions and Answers).

We have until May 17 to comment on these proposed changes and let regulators know that they don’t go far enough, so please act today!

Your comments matter. Regulators will be hearing from legions of bank representatives, and we need to make sure that they hear from advocates as well. Here is a sample comment letter that we encourage you to personalize and send to regulators:

Regulators bring necessary reform to bank payday lending—now it’s time to reform all high-cost credit

Bank regulators released proposed rules on April 30 that, at long last, would enact strong consumer protections for “deposit advance products”—essentially, payday loans offered by a mainstream bank. To hear it from the banks, making sure that borrowers can pay back loans and preventing an endless cycle of debt would somehow make consumers worse off (“Banking group says new regs could push consumers into risky payday loans,” April 28). 

Regulators curb worst bank payday lending practices

The proposed standards require an assessment of the borrower’s eligibility for the product and financial capacity  to repay the loan and meet other financial obligations, limit the number of such loans borrowers can receive in one year, and mandate adequate management and monitoring of the significant safety and soundness risks posed by offering these high-cost, short-term loans.  The public has an opportunity to comment on the proposed guidance. 

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