Dodd OD Protection Legislation.

As first reported on this blog on 7/1/09, congress is determined to severely restrict NSF and Courtesy Pay fees. It appears that this issue will be addressed sooner rather than later.

Sen. Chris Dodd (D-Conn.) introduced his version of overdraft protection reform legislation last week. H.R. 1799 would:

• require consumers to opt-in to their bank or credit union's overdraft protection program, and prohibit discrimination against consumers who do not opt-in.
• limit the number of fees that could be assessed to a consumer to one per month and no more than six per year. (What happens if a member exceeds this limit? do we close their account?)
• require fees to be proportional to the cost of processing the overdraft and prohibits the manipulation of debits in order to generate additional overdraft.
• Prohibit institutions from manipulating the order in which they post transactions in order to assess extra fees.
• require the overdraft fee to be considered a finance charge under TILA, but would not include the fee in the calculation of interest for the purposes of the usury ceiling in the Federal Credit Union Act.