Rep. Carolyn Maloney's (D-N.Y.) Overdraft Protection Act bill, which would severely limit the ability to collect overdraft fees and require new disclosures, has “just about zero chance of being passed,” said NAFCU Vice President of Legislative Affairs Brad Thaler.

For one thing, Thaler said, the bill's 46 co-sponsors are all Democrats, which means HR 5691 is a partisan bill in a Republican-controlled House. Additionally, many parts of the bill are viewed as unnecessary due to Regulation E opt-in requirements that went into effect in July 2010.

Maloney's bill, introduced Monday, would expand current courtesy pay opt-in requirements to include paper checks, ATM withdrawals and recurring ACH payments.

The bill would also require disclosure of coverage and fees, both at the time of original opt-in, and again when an overdraft fee is charged; require that overdraft fees be “reasonable and proportional” to the cost of the transaction; cap fees to one per month and six per year; and, ban the ordering of transactions to maximize overdrafts.

The bill would also define overdraft fees as finance charges subject to the Truth in Lending Act disclosures, and require the Consumer Financial Protection Bureau to study prepaid debit card overdraft fees and grant rulemaking authority over those fees to the CFPB.

Maloney has “pushed this issue for a number of years,” Thaler said.

So, why even introduce the bill? Thaler said he's speculating, but thinks Maloney and her Democrat co-sponsors are “putting something out there that they'd ultimately like to see as a marker for CFPB.”

The agency is currently studying overdraft programs and recently extended the comment period on the topic through June 29.

Instant Insights /

Overdraft Bill Has 'Just About Zero Chance' of Passing: NAFCU's Thaler

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