Comment on the Interagency Guidance on Overdraft Protection or “Bounced Check” Programs

fed_july2004_r1197_overdraft.pdfComment letter on the proposed interagency guidance on overdraft protection finds that the the guidance will not protect consumers from a risky “service” that effectively amounts to a short-term, high-rate loan program.  Suggests that bounced check loans ought to be regulated under the Truth in Lending Act rather than the Truth in Saving Act.  TILA coverage would require that banks disclose the APR, solicit the affirmative assent of the consumer before enrolling them in a bounced check loan product, and ensures private right of action.