Congress will get another chance to limit checking account overdraft fees that continue to annoy customers and produce billions of dollars in revenue each year for banks and credit unions.
Reps. Carolyn Maloney and Maxine Waters have introduced a bill that would limit the cost of overdraft fees and prohibit practices that increase the likelihood customers will overdraw their accounts.
The Overdraft Protection Act would limit overdraft coverage fees in various ways.
prohibit financial institutions from charging more than one overdraft fee per month or more than six each year;
require overdraft fees to be “reasonable and proportional” to the amount of the overdraft; prohibit a fee if the overdraft results solely from a hold placed on an account that exceeds the amount of the transaction;
many merchants, such as hotels and gas stations, automatically place a hold on the money in your checking account when you pay with a debit card.
The bill would also ban the practice of posting checking account transactions in a way that maximizes overdraft fees. Some financial institutions routinely clear debits from highest to lowest dollar amount.
Story by Herb Weisbaum for Today.
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