Ahead of a markup scheduled to begin tomorrow in the House Financial Services Committee, the American Bankers Association sent a memo to lawmakers expressing opposition for H.R. 4277, the Overdraft Protection Act. Sponsored by Rep. Carolyn Maloney (D-N.Y.), the bill would amend the Truth in Lending Act to make changes to existing overdraft rules.
Specifically, it would prohibit banks from charging consumers more than one overdraft fee in a month and more than six overdraft fees in a year, regardless of the consumer’s choice to opt-in to overdraft protection. ABA warned that the bill “would prevent important payments from being paid, deny customers access to liquidity during challenging times and cause customers to incur additional fees and inconveniences.”
The association also pointed out that banks of all sizes already offer consumers a wide array of account options, many of which do not offer overdraft protection, including Bank On-certified accounts that are currently offered by depository institutions accounting for 56% of the deposit market.