Overdraft-Fee Restrictions

Senior Senate Democrats have proposed legislation that would sharply restrict most transaction-account overdraft fees to the point of likely eliminating them for most consumers at most depository institutions.  Non-sufficient-fund (NSF) charges would be similarly constrained and, where fees are allowed, transaction-posting procedures would make it impossible for consumers to pay multiple fees over several days even in the event of a small overdraft.  This could provide significantly-increased consumer protection from nuisance and even predatory charges, but also make it harder for some consumers to handle urgent expenses without resorting to high-cost providers of short-term loans so far largely outside the reach of federal regulation.