On November 17, the Senate Banking Committee held a hearing on S. 1799, the Fairness and Accountability in Receiving Overdraft Coverage Act of 2009 (FAIR Act), sponsored by Senator Chris Dodd (D-CT). While this legislation is designed to protect consumers from unscrupulous financial products, the results will adversely affect many families and individuals who are already dealing with financial challenges.
This bill will severely limit your options.
If passed, S. 1799 will limit the number of overdraft coverage fees financial institutions can charge their account holders to one per month and six per year. The results could have the following devastating effects for consumers:
Users of ODP:
If passed, S. 1799 (the Fair Act), will not only limit your access to ODP, it will also mean that:
- You will incur additional NSF charges and bounced check fees from merchants;
- You could incur damage to your credit rating and possible prosecution; and there is a potential loss of check-writing privileges which could drive you to more expensive alternatives like payday lenders.
Non-Users of ODP:
Even if you do not regularly use overdraft services, you will be penalized as well by the loss of free checking and additional fees as financial institutions are forced to re-price or even discontinue key services to make up for lost overdraft fee revenue.
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