Congress Retreats on Overdraft Protection Bill

WASHINGTON – Leaders of the House Financial Services Committee this week pulled from consideration enacting new curbs on overdraft protection after a withering lobby from banks and credit unions. Committee leaders, including the chief sponsor of the bill, Rep. Carolyn Maloney from New York, were doubtful they had enough votes to pass the measure in light of the opposition, Capitol Hill sources told The Credit Union Journal. Their opposition put the credit union lobby in a difficult position because Maloney, who is chair of the Subcommittee on Financial Services, will have final say on whether to hold a hearing on CURIA, the credit union regulatory relief bill. Maloney does have the support of the credit union-backed consumer lobby, the Center for Responsible Lending, on the overdraft protection bill and is expected to move for a vote on the bill at a later time, perhaps as early as next week. The bill would bring overdraft protection programs under the Truth in Lending Act, requiring that fees be included in computing the annual percentage rate, and require that consumers opt-in, or sign up for, overdraft protection.