Watching this all transpire is a sad reflection on regulation and legislation today. It's become an era of reacting to crises, not preventing them.

Did members of Congress miss all the advertisements for no money down, no income required loans! The only thing missing were ads saying you didn't even have to use your real name. There were red flags everywhere. Home prices were skyrocketing to levels never seen before and people were in over their heads. You did hear lawmakers talk about the good news of this–the highest level of homeownership ever. But at what cost?

Now we see Congress swinging into action on overdraft protection. About time. I believe in overdraft protection. Banning it would be a colossal mistake. It is a valuable service to the consumer who occasionally loses track of their financial picture or who is a little short every now and then. Overdraft protection prevents the consumer from getting dinged twice–once from their financial institution and again from the creditor where their payment would be late if it were not for the protection. It's a good product if implemented properly by the financial institution and used responsibly by consumers. You can even argue it's a tool to fight predatory lending. Better to incur an overdraft charge than get into a much worse predatory loan scenario. But financials shouldn't be able to hide the details of their programs and deliver it as a stealth product, as many do now.

The bill would amend the Truth in Lending Act to among other things require more disclosures of the programs to consumers, restrict certain language in advertising, and require users to opt in. These are all sensible provisions.

One of the most controversial provisions would require financial institutions to alert consumers of overdraft fees at the ATM and with debit transactions. Alerts at the ATM and POS terminals are critical. According to a study by the Center for Responsible Lending, 46% of overdrafts come from these sources, versus just 27% for paper checks. Already some banking and credit union groups have said alerts would be doable, but a technological nightmare. Don't believe it. It can be done. It will take time, and Congress would have to give adequate implementation time on this provision, but it is plausible. It fits in so nicely with our new "connected" society. Consumers should get an alert at the ATM if they are about to overdraw, it might make them think twice about the withdrawal. Let's not fight these steps, let's get behind them.

Congress is also pushing to have APRs for overdraft fees. This I don't agree with. In fact I think APRs would confuse consumers further. A fee is something consumers understand. It is a one-time charge for a service they used. When you start talking APR, they're going to wonder where the loan documents are and how long the loan term is. Also, if that were to happen there would have to be a carve-out for credit unions because of their 18% interest rate cap.

I am a believer in less regulation not more, but when it comes to consumer issues more may be necessary these days. Regulators and legislators should be giving credit unions and banks breaks where they need it, but keeping a tight leash on consumer issues. Give credit unions risk-based capital (they are so risk averse it's incredible), raise the member business lending cap (they can help the truly small business owners that banks don't), and open up underserved areas to all credit union charters (a shame bankers were able to force NCUA into a reversal), but don't give even credit unions a pass on consumer issues.

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