Abusive Bank Fees

Study to Show Americans Paying Extra Billions in Abusive Bank Overdraft Fees

Unfair Practices Allow Banks to Collect More in Fees Than They Lend Out To Cover Overdrafts; New Report Updates 2005 Center for Responsible Lending (CRL) Estimate.

A new estimate of the billions of dollars paid out in abusive bank overdraft fees by unwary American consumers is the focus of a major Center for Responsible Lending (CRL) study to be released at 11 a.m. EDT Wednesday (July 11, 2007) during a live, phone-based news conference.

The new Center for Responsible Lending report explores some of the reasons behind the rapid growth in overdraft charges, and shows how the abusive fees now total more than the funds that banks and credit unions lend out to cover the actual overdrafts. The study updates CRL’s 2005 estimate of the annual cost of abusive overdraft lending and is based on an analysis of several thousand overdrafts reported in a large, commercially-available database of personal banking transactions.

News event speakers will be:

  • Eric Halperin, Washington, D.C. office director, Center for Responsible Lending; and
  • Congresswoman Carolyn Maloney (D-NY).

According to the CRL report, today’s most common overdraft systems are designed to generate more overdrafts from customers, resulting in enormous fee revenues for banks and credit unions. These systems use a mechanism that makes small, unsolicited loans to checking accountholders whose balances are in the negative, collecting high fees for each transaction and often sinking them even deeper into the red. The problem is especially pressing because, although these systems are costly for all consumers, financially distressed families are hit the hardest.

  • To Participate: You can join this live, phone-based national news conference (with full, two-way Q&A) at 11 a.m. EDT on July 11, 2007 by dialing 1 (800) 860-2442. Ask for the “abusive bank overdraft fees” news event.
  • Can’t Participate?: A streaming audio replay of the news event will be available on the Web at the Center for Responsible Lending as of 5 p.m. EDT on July 11, 2007.
  • Contact: Ailis Aaron Wolf at (703) 276-3265.

About The Center for Responsible Lending

The Center for Responsible Lending is a national nonprofit, nonpartisan research and policy organization dedicated to protecting home ownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, the nation’s largest community development financial institution. For additional information, please visit Center for Responsible Lending on the Web.

Comments
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