FDIC Wants to Restrict Overdraft Fees

Following the recent lawsuit filed against BBVA Compass Bank and general concern surrounding deceptive bank practices involving overdraft fees, the Federal Deposit Insurance Corporation has called for tight restrictions on fees charged for overdrawn checking accounts. Separately, many of the nation’s largest banks have already announced their plans to revisit overdraft policies.

However, FDIC Chair Sheila Blair has raised the concern that banks may not be going far enough in their restrictions of these fees. She has called on the Federal Reserve to finalize the rulemaking portion of the overdraft reform, but the Federal Reserve maintains that it is still unsure how far it should go concerning overdraft reform.

Analysts worry, though, that banks will just resort to dropping certain accounts because of the fact that banks will not be able to make money of these accounts any longer. Other analysts also say that restrictions on overdraft fees could end up hampering the recovery of the financial industry as a whole.

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