Washington Post columnist Nancy Trejos is skeptical.   From her column today which discusses the recent Federal Reserve proposal to crack down on “deceptive” practices:

“The OTS {Office of Thrift Supervision} and Fed proposal show that these agencies recognize that abusive overdraft loans are a significant problem,” said Eric Halperin, DC director of the Center for Responsible Lending. “However, they would continue to allow banks to enroll customers, who never signed up for it, into the most expensive credit program the bank offers.”

They also urged the agencies to consider banning overdraft fees caused by check holds resulting from a bank’s policy to delay the availability of deposited funds. “These rules should also recognize that it is an unfair practice for a bank to charge an overdraft fee or a bounced check fee for a problem caused by the bank’s decision to place a hold on the consumer’s check deposit,” said Gail Hillebrand, financial services campaign manager of Consumers Union.

The Payday Pundit has been making the point over and over again the payday lending customers are frequently trying to avoid bounced check fees and overdraft protection costs. 

The Feds are serious.  Apparently, big announcements will be made today regarding new rules for credit card companies to end deceptive practices.  The Washington Post is playing it big, making it the top story of the day.  From the piece:

The proposed regulations, which could be finalized by year’s end, would label as “unfair or deceptive” practices that consumers have long complained about. That includes charging interest on debt that has been repaid and assessing late fees when consumers are not given a reasonable amount of time to make a payment. When different interest rates apply to different balances on one card, companies would be prohibited from applying a payment first to the balance with the lowest rate.

“It’s stronger than what has been issued in the past,” said William Ruberry, a spokesman for the Office of Thrift Supervision, which has joined the Fed and the National Credit Union Administration in backing the proposals. “What they proposed is a significant set of rules governing credit card practices and overdraft protection.”

 

The federal regulators that oversee the savings and loan industry are proposing new regs to prevent ”deceptive acts or practices regarding credit cards and overdraft protection.”  The Payday Pundit says it’s about time.      Key paragraph from the announcement:

Today’s proposal addresses practices that have raised concern about fairness and transparency. For credit cards, the proposed rule would address: (1) unfair time periods for making payments; (2) unfair payment allocations; (3) unfair interest rate increases on outstanding balances; (4) unfair fees from credit holds; (5) unfair methods of computing balances; (6) unfair security deposits and fees charged to an account for the issuance of credit; and (7) deceptive offers of credit. For overdraft protection services on deposit accounts, the proposed rule would address: (1) a consumer’s ability to opt out of overdraft services; and (2) unfair fees for debit holds.