Sen. Chris Dodd plans to introduce legislation that would require banks to get permission before allowing fee-generating overdrafts. Banks are on track to earn $38.5 billion in overdraft fees this year and, according to a study by the Federal Deposit Insurance Corp, most banks offer the “service” automatically. Common “features” of the programs include not notifying customers when an overdraft is about to occur, not offering them a chance to cancel the transaction, and processing the transactions in ways designed to increase the number of fees.
Banks now make more on debit card overdraft fees than credit card penalties—they’ll rake in about $27 billion in 2009 alone, according to the New York Times. They obviously have zero incentive to curb the practice. In fact, one economist told the paper that “45 percent of the nation’s banks and credit unions collect more from overdraft services than they make in profits.”
Here’s a dart to deflate the feel-good dreams of universal health care — those nefarious, profiteering insurance companies are actually hoping it passes.
American Express and Discover will no longer bill customers who exceed their credit limits, according to company spokespeople. The creditors aren’t eliminating the fees because they care about their customers. No, they’re providing what American Banker calls “the first concrete examples of how a new law will restrict issuers’ abilities to turn a profit.” The new CARD Act that Congress passed in May requires consumers to opt-in before they can exceed their credit limits. Since overlimit fees, which can reach $39, aren’t very profitable for creditors, they decided to ditch the fees altogether.
Tomorrow, a Senate committee will hold a hearing on legislation that grants passengers the right to deplane if their plane is delayed on the runway for more than 3 hours. The legislation will also require that airlines provide water, food, and bathroom facilities during delays. If passed, it will be ignored by Delta.
Australian consumers will soon be able to challenge any bank fee that they consider “unreasonable,” thanks to a new law that could save consumers up to $1 billion. Banks that want to keep levying excessive fees for late payments and overdrafts will need to prove that the charges are reasonable by revealing the true processing costs behind the fee.
Shhh, everyone, gather near and listen to Treasury Secretary Timothy Geithner deliver the most beautiful, wonderful mandate we could give to a new federal agency: “The agency will have only one mission—to protect consumers.” And with that, the Treasury Department sent to Congress legislation that will create the brand new Consumer Financial Protection Agency.
H.R. 2870 would require all airlines to accept slightly larger carry-on bags, which is great if you actually abide by the published carry-on limits. If you don’t, well, get ready to change your scofflaw ways because the TSA will enforce the new limits, and even slightly oversized bags won’t make it past security checkpoints.
The House Energy and Commerce Committee just approved comprehensive food safety reform, setting it up for consideration on the House floor in the coming months. The Food Safety Enhancement Act was approved by voice vote, indicating bipartisan support and suggesting a relatively smooth passage through the entire House.
“Revolvers”—customers who keep a revolving balance on their credit cards—used to be the cash crop for credit card companies. But now more and more of them are turning into expensive charge-offs, and the new CARD act is going to make it harder to acquire those riskier customers anyway. As a result, card companies are beginning to look more closely at the customer who was most hated back in the credit-orgy years: the deadbeat.
As studies continue to link bisphenol-A (BPA) with all sorts of health problems, states and cities are banning the chemical from baby bottles and sippy cups and Congress is considering a ban in all food containers. This worries industry groups, who last week held a private meeting to devise strategy to protect the use of BPA. Someone sent the notes to the Washington Post.
The Food and Drug Administration might actually be able to protect us from dangerous food if Congress passes a bill recently circulated by six powerful members of the House Energy and Commerce Committee. The draft legislation would finally empower the FDA to quarantine suspect foods and slap violators with both civil fines and criminal charges.
The House this week finally passed the Passengers Bill of Rights, ensuring that delayed passengers will have adequate access to food, water, and even restrooms. The ironically delayed piece of consumer legislation has languished for years, but the bill that passed the House still isn’t good enough. Under the House legislation, airlines themselves get to decide what constitutes an “excessive delay,” allowing them to keep stranded passengers on the tarmac for hours. Let’s look at the bill and see what changes need to be made in the Senate…
Good news, Iowans! Your legislature has decided to enact a consumer bill of rights giving you the power to sue businesses that commit fraud. Unless, of course, you’re going after banks, attorneys, insurance providers, doctors, cable companies, telecoms, utilities, veterinarians, realtors, charities, architects, or certain retailers. Still, the bill isn’t entirely useless…
One unexpected benefit of the CARD Act, if it passes the Senate vote, is that Senator Charles Schumer of New York has included a provision that prevents abusive gift card practices.