• overdrafts from debit card point-of-sale transactions and ATM withdrawals make up 46 percent of overdraft loans,
• debit card overdraft loans cost more than overdraft loans for other types of transactions (the median debit card loan is $2.17 per dollar borrowed, while it is 86 cents per dollar for checks), and
• customers surveyed overwhelmingly want to be warned if they are about to overdraw from their accounts, and only 2 percent would choose to go through with a transaction that results in an overdraft if they were notified about it.

Bank customers in many cases are not given notification of an impending overdraft at ATMs and points-of-sale. Without a choice to opt-out, customers are often automatically given overdraft protection services that provide customers with loans if they overdraw. These services impose charges on customers for the loan, and customers often pay interest until their bank account is level again.

Rep. Carolyn Maloney (NY-14), a senior member of the House Financial Services Committee and author of overdraft fee reform in the last session of Congress (H.R. 3449), said today that she intends to reintroduce her overdraft fee legislation this year and will work to take action.

“There is no problem with the concept of overdraft loans – banks absolutely have the right to make money for services they provide – but I believe in being up front and giving consumers all the information they deserve,” said Maloney. “I intend to again introduce legislation to make the overdraft process as transparent as possible. I will work to make this an issue that our committee examines.”

The legislation that Maloney introduced in the 109th Congress (http://maloney.house.gov/index.php?option=com_content&task=view&id=53&Itemid=61) with current committee Chairman Barney Frank (MA-4) would:

• ensure that consumers opt-in to potentially costly overdraft protections, rather than being forced into them without notification;
• require that consumers are alerted when they about to overdraw from their account at ATMs; and
• require that banks provide full, written disclosure of their overdraft policies to customers.

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