Hinojosa explains decision to take name off overdraft protection bill

[douglas9]

EDINBURG, Nov. 24 - U.S. Rep. Rubén Hinojosa has told the Guardian why he has taken his name off of a piece of legislation that would limit bank overdraft fees.


“I decided to withdraw my name as a cosponsor of HR 3904, the “Overdraft Protection Act of 2009” once the Federal Reserve issued its final rule on overdraft protection, which includes the opt-in approach I have supported over the years,” said Hinojosa, D-Mercedes.


The Fed’s new rule, issued Nov. 12, require banks to ask for permission from consumers before they can place them into overdraft fee programs.


“The Final Rule is supported by over 20,700 comment letters, the majority of which were from individual consumers favoring the opt-in approach, and is solidified through consumer testing and four rounds of interviews with a variety of consumers across the country.”

http://www.riograndeguardian.com/rggnews_story.asp?story_no=20

[sonias]

1. Who are people to trust - the banks?

"We promise we'll behave." Yeah, we've heard that one before.

Opt-in approach essentially means an extra box you probably wouldn't even notice on the form you fill out to set up an account. Sure everyone wants to have overdraft protection to make sure none of their checks bounce. But what they don't want is to be hit with a $35 fee every time that happens. One problem in their account could mean hundreds of dollars of extra fees. If a deposit to the customer account is not credited in time or if that didn't clear the whole overdraft thing just multiplies. There should be a way to stop it at some cap.

Banks are making millions if not billions on this type of "service". If you calculated it as interest on the amount borrowed it would be incredibly high.

Disappointing for Hinojosa for not representing his constituents. He probably gets a lot of contributions from bankers.

Sonia