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Schumer touts legislation protecting from bank fees

Sen. Charles Schumer wants to reduce the amount of overdraft fees charged to customers by the banking industry and is pushing legislation that would curb banks’ alleged abusive practices, he said Monday.

Schumer, during a news conference at Marketplace Mall in Henrietta, said he supports legislation that would prevent banks from placing their consumers, without their knowledge, in overdraft loan programs and would require banks to warn customers when a transaction will result in an overdraft fee.

Legislation has been introduced in the House of Representatives by Carolyn Maloney, D-Manhattan. Schumer, D-N.Y., is co-sponsor of a Senate legislation sponsored by Christopher Dodd, D-Conn.

“Bottom line, debit cardholders are getting scammed by their banks,” Schumer said. “Families across Western New York are being involuntarily placed in these overdraft loan programs and getting ripped off by excessive fees. It’s time to stop them dead in their tracks.”

Banks bring in billions of dollars from overdraft fees, mostly from small transactions, Schumer said.

Some 81 percent of banks surveyed by the Federal Deposit Insurance Corp. allow overdrafts at ATMs and debit card terminals, Schumer said, with only 11 percent of banks surveyed notifying customers that they are about to overdraw their account.
 

(c) 2009 Rochester Business Journal. Obtain permission to reprint this article.

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