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Washington
Hinojosa withdraws support for House overdraft reform bill
WASHINGTON (11/30/09)—Rep. Rubén Hinojosa (D-Texas) last week officially withdrew his name as a sponsor of Rep. Carolyn Maloney’s overdraft reform bill, H.R. 3904, "The Overdraft Protection Act of 2009." Maloney’s bill, which was referred to the House Committee on Financial Services in late October, would, according to www.thomas.gov, "amend the Truth in Lending Act to establish fair and transparent practices related to the marketing and provision of overdraft coverage programs at depository institutions." Reps. Barney Frank (D-Mass.), Luis Gutiérrez (D-Ill.), Gary Ackerman (D-N.Y.), Michael Capuano (D-Mass.), Keith Ellison (D-Minn.), Anna Eshoo (D-Calif.), Paul Hodes (D-N.H.), Walter Jones (R-N.C.), Paul Kanjorski (D-Penn.), Daniel Maffei (D-N.Y.), Brad Miller (D-N.C.), Gwen Moore (D-Wisc.), Jackie Speier (D-Calif.), and Maxine Waters (D-Calif.), remain sponsors of the bill. The Federal Reserve Board earlier this month introduced a final rule that would require credit unions and other financial institutions to obtain consent from consumers before they could be charged overdraft fees for ATM and one-time debit transactions. The rule, which will go into effect on July 10, also requires credit unions and other financial institutions to fully disclose the overdraft services, the fees, and the consumer's right to opt-in, and ensures that members or customers that do decide to take part in the overdraft protection service may cancel the service at any time. Credit Union National Association Senior Vice President of Legislative Affairs John Magill said of Hinojosa’s action, “I think the congressman’s decision to withdraw from the bill once the Fed rules were out reflects what CUNA has been saying all along. To the degree that changes need to be made to the consumer protections attached to overdraft plans, let the federal rule makers--those most familiar with the service--make them.” “We do not believe this needs a statutory sledgehammer at this time,” Magill added. National Credit Union Administration Chairman Debbie Matz earlier this month said that she supports overdraft protection plans that are carefully done with minimal impact on members, such as limiting the number of transactions and corresponding fees per day.


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