ABA Opposes Overdraft Bill, Calls Bad Credit Report Bill


The American Bankers Association is asking members of the House Financial Service Committee to oppose two bills that would rewrite federal rules on overdraft fees and the use of credit information to determine mortgage eligibility. Both bills are due to be flagged by committee this week.

The Overdraft Protection Act (HR 4277) would restrict the ability of banks and other financial institutions to collect overdraft fees and disclose their fee policies. In a letter sent to committee members Today, the ABA said the bill upsets a framework established in 2009 when the Federal Reserve amended Regulation E to require customers to opt in for overdraft protection for single debit card transactions ( in-store, at the point of sale) and ATM transactions.

“If the Overdraft Protection Act is enacted, deposit-taking institutions would be prohibited from charging consumers more than one overdraft fee per month and more than six overdraft fees per year, regardless of the choice of consumer buy-in,” the ABA said.

The Expanding Access to Credit through Consumer-Permissioned Data Act (HR 8485) would require lenders to consider additional and alternative information not typically considered when evaluating a borrower for a mortgage and that are not usually found in credit reports. While calling the bill well-intentioned, the ABA said the legislative text was flawed, adding new mandates and encumbrances to the mortgage process. The association also said the bill does not clearly define which additional data sets should be considered and adds more complexity to the already extensive disclosures provided in the mortgage process.

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