Overdraft fees present a huge problem for many Americans, especially the most financially vulnerable, by hitting them with an extra fee when they’ve already overdrawn their account.

In order to combat the problem of overdraft fees across the country, a member of the House Financial Services Committee is reintroducing her bill to make certain overdraft fees illegal, ultimately limiting the fees that are charged to those that overdraw their accounts.

U.S. Rep. Carolyn Maloney, a senior Democrat from New York, had previously attempted to introduce her bill — the “Overdraft Protection Act” — however, while Republicans were in control of the House, the bill did not get very far.

Recently, Rep. Maloney reintroduced the overdraft fees bill to the House, and next intends to push House Financial Services Chairwoman Maxine Waters to hold hearings to debate the bill, which would make certain overdraft fees illegal.

This bill comes as a response to countless complaints about deceptive overdraft fee practices, such as when financial institutions deliberately reorder transactions from the natural chronological order (that is, from the order in which they are made) to highest to lowest, an order intended to maximize the number of overdraft fees the consumer is required to pay. Consumers have also complained about the rising costs of individual overdraft fees across the country, as well as banks not giving people a chance to opt-out of the programs or not fully informing them of what overdraft protection programs entail. Some may also not be aware of how high the individual overdraft fees themselves are.

According to Rep. Maloney’s statement on the reintroduction of her overdraft bill, U.S. consumers are hit with approximately $15 billion per year in overdraft fees.

“Unfair, deceptive and costly overdraft fees hit those who can afford them the least the hardest; cash-strapped hardworking Americans and college students who are struggling to pay their bills,” said Rep. Maloney.

“Even one overdraft penalty can quickly trigger hundreds of dollars in fees and drive customers into a financial hole.”

Under Maloney’s bill, overdraft fees would be required to be both reasonable and proportional. Plus, financial institutions would be prohibited from manipulating the transaction order to incur the highest fees possible, limit the number of overdrafts that can be incurred, ensure that consumers are allowed to opt into these programs, and require thorough disclosures for consumers prior to opting in.

A slew of major organizations have thrown their weight behind the legislation, endorsing it and asking Congress members to support the bill as well.

“This bill will protect consumers from unfair, deceptive and costly practices,” Rep. Maloney said. “This is absolutely predatory.”

A number of financial institutions are currently being investigated for deceptive or unfair overdraft practices. If you have been hit with these or other unfair or deceptive overdraft practices from your bank or credit union, you may be able to file an overdraft fee lawsuit and pursue compensation. Consulting an experienced attorney can help you determine if you have a claim, navigate the complexities of litigation, and maximize your potential compensation.

If you were charged overdraft fees or NSF fees by your bank or credit union that you believe are improper for any reason, the attorneys who work with Top Class Actions are ready to investigate these fees on your behalf.

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This article is not legal advice. It is presented
for informational purposes only.