The Consumer Overdraft Protection Fair Practices Act.
This bill would enforce laws against the current scrupulous activity banks engage in whereby they order consumer transactions from largest to smallest during processing to maximize overdraft “protection” fees. This process is currently under legal scrutiny even without this bill. It would also make it illegal for banks to approve transactions on debit and Visa “check cards” for which the money is not in the account unless the “overdraft protection” services are applied for by the consumer. Banks currently count on these over-the-limit transactions to maximize overdraft protection fees. The banking industry made 73 billion in such fees during 2006. It was their single largest source of revenue.
In 1999 a class action lawsuit was filed against Bank of America for engaging in the practice of “Biggest Transaction First” transaction and check clearing. They paid a $9 million dollar settlement in this suit without admission of fault and continue the practice until this day. I think more individuals should file suit against this practice, not class action attorneys, because the impact against BoA would be far greater and would receive far more attention than a few law firms cashing out.
Obviously this resolution is going to come under harsh attack by the omni-present and feared banking lobby. May they burn in hell along with all other corporate interest lobby’s.
UPDATE: Consumers who think the current system is unfair should write to the Federal Reserve and complain, and write to their congressional representatives asking them to support the “Consumer Overdraft Protection Fair Practices Act” introduced by Congresswoman Maloney.