/PRNewswire/ -- Congressional proposals to rein in abusive overdraft practices are long overdue, Center for Responsible Lending executive Eric Halperin told the House Financial Services Committee today.
Halperin, who is director of CRL's Washington office, gave full support to legislation aimed at reforming bank overdraft programs, which cost consumers $23.7 billion last year and are among the most predatory lending products on the market.
"Charging people a $35 fee for a small, debit card transaction is unacceptable," said Halperin, director of CRL's Washington office. "It doesn't save them bounced check fees, it simply skims money from their account and puts them in a bind."
Overdraft fees shot up 35 percent from 2006 to 2008. Banks and credit unions drive up the fees through unfair and costly practices such as automatically approving a debit card transaction even if it overdraws an account and then charging a fee that is often higher than the shortfall itself. Also, instead of recording transactions in the order they are made, financial institutions typically reorder them to increase the number of overdraft fees a customer incurs.
Federal bank regulators, including the OCC and the Federal Reserve Board, have recognized the abusive nature of these practices for years but failed to use their oversight authority to rein them in. The FRB finally is weighing a rule that would take a small step forward, but the Overdraft Protection Act of 2009, (H.R. 3904), under consideration in the House, and similar legislation in the Senate would offer real, substantive reform.
Both bills would give consumers an informed choice on whether they want to pay for high-cost overdraft coverage. They would also limit the number of fees a bank could charge each month and year, and they would require that fees be reasonable and bear some relationship to a bank or credit union's cost of covering a shortfall. And both bills would ban the widespread practice of triggering avoidable overdraft fees by re-ordering customer transactions to maximize overdrafts.
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Friday, October 30, 2009
Fed Fixes for Overdraft Fall Short, Strong Reform Crucial, CRL Tells Congress
Wednesday, October 8, 2008
SunTrust Bank Lowers Prime Rate
PRNewswire-FirstCall/ -- SunTrust Bank announced today it has lowered its prime lending rate to 4.50% from 5.00%, effective October 8, 2008. The prime rate is a benchmark used to set interest rates on various forms of corporate and consumer credit. The prime rate last changed on April 30, 2008.
SunTrust Banks, Inc. (NYSE:STI) , headquartered in Atlanta, is one of the nation's largest banking organizations, serving a broad range of consumer, commercial, corporate and institutional clients. As of June 30, 2008, SunTrust had total assets of $177.4 billion and total deposits of $119.8 billion. The Company operates an extensive branch and ATM network throughout the high-growth Southeast and Mid-Atlantic states and a full array of technology-based, 24-hour delivery channels. The Company also serves customers in selected markets nationally. Its primary businesses include deposit, credit, trust and investment services. Through various subsidiaries the Company provides mortgage banking, insurance, brokerage, investment management, equipment leasing and capital markets services. SunTrust's Internet address is suntrust.com .
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