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Dodd calls for more protection against overdraft fees
11/18/2009
As consumers continue to struggle to pay off debt, Connecticut Democratic Senator Chris Dodd is calling for more protection for consumers against overdraft fees.
Recently, the Federal Reserve passed new rules that would require banks to get permission from their customers before enrolling them in an overdraft protection service. These services charge consumers a fee each time they overdraw their account.
Prior to the Fed's rules, Dodd introduced a bill that would also limit the practice of enrolling bank customers into overdraft protection programs. Recently, the Senate Banking Committee, of which Dodd is the chair, interviewed witnesses in relation to overdraft fees, including people who have been affected by the practice.
Dodd said that though it is the responsibility of consumers to keep track of their personal finances, banks shouldn't enroll people in such programs without their permission.
"Families in my state of Connecticut and across the country are already struggling to make ends meet - and these unfair and excessive charges are making it even harder on them," Dodd said.
Along with requiring a customer's permission for the program, Dodd's bill would stop banks from reordering transactions, which can often lead to overdrafts.
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