Whither the overdraft bill?
Whither overdrafts? The Fed is cracking down on some of the most egregious practices, but there’s still a lot more to be done on the overdraft front, including limiting the number of overdraft fees that any bank can assess per day; extending the Fed’s protection to bounced checks as well as debit cards; and capping overdraft fees at a reasonable level.
That kind of stuff is being left to Congress, and specifically to Barney Frank and my very own Congresswoman, Carolyn Maloney. Their Overdraft Protection Act is a very good piece of legislation, and it was cruising along on the House Financial Services Committee’s agenda until a week or two ago — when it suddenly disappeared, with seemingly no sign that it’s going to return any time soon.
Conspiracy theorists will see the work of the banking lobby here, and specifically the ABA, whose Nessa Feddis testified in October that “limits on how many fees can be charged per month will limit consumer choice”. Er, no, it wouldn’t, it would just limit the tens of billions of dollars in profits that banks currently make from these fees. And it would return those profits to consumers, whence they currently are extracted, who I’m sure could put that money to much better use.
Update: Barney Frank’s office just called back. “Our agenda has been completely consumed by the financial regulatory reform bill that we are still working on. Once we pass this thing we’ll be able to reconsider it. Whether that happens next year or not we don’t know, it’s probably not going to happen this year. It’s something we want to consider.”