Overdrafts

Some bankers, economists, policy experts and even Mark Cuban say that creative uses of overdraft programs could be lifelines for consumers and businesses whose finances have been upended by the coronavirus crisis.

The billionaire investor and entrepreneur sees problems with small businesses having to apply for loans to get coronavirus relief. He says a more efficient approach would be to let them run negative balances on their bank accounts.

In some cases, financial institutions are required by court order to divert funds to private creditors. But the industry has added its voice to a consensus for a legislative update to ensure Americans receive their full amount.

The two large banks are holding off for a month on collecting on negative balances to ensure that customers receive the full amount of government payments deposited into their accounts.

Republicans balked at measures like an overdraft fee ban and interest rate cap in the recent stimulus bill, but Sen. Sherrod Brown, D-Ohio, isn’t done trying to add such proposals to future relief packages.

The Fairfax, Va.-based credit union agreed to pay $2.7 million in the class action case, though it did not admit any wrongdoing.

If Capitol Hill plans another round of stimulus, Democrats could have more leverage to demand steps such as suspending overdraft fees – a measure which could have a big impact on credit union revenue.

If Capitol Hill plans another round of stimulus, Democrats could have more leverage to demand steps such as suspending overdraft fees or placing a temporary cap on consumer lending rates.

Motivated by the entrepreneur and TV celebrity, Citizens Bank of Edmond is offering an overdraft line to give customers quick access to cash they will eventually receive from the federal government.

Corporations have tapped more than $124 billion in lines in the past three weeks; rating agency says virus “could wipe out a full year of U.S. banking profits.”

Congressional proposals could expand Federal Reserve liquidity support, delay a new credit loss accounting standard, provide certain accounts with unlimited deposit insurance and more to help businesses and consumers reeling from the coronavirus outbreak.

The country’s banks plan to raise overdraft rates to 40%, which has regulator watching; starting this year pay increases won’t be retroactive to Jan. 1.

Banks’ third-party technology providers may face increased scrutiny; Rep. Porter wants more data about "confusing" checking account fees.

The complaint alleges the lead plaintiff was charged two separate fees for the same transaction and she didn't have sufficient funds.

The Massachusetts-based institution, which will forgive more than $750,000 in fees, is the latest to come to an agreement regarding overdraft claims.

Even with fee revenue already down, Oregon-based Providence FCU has cut its overdraft fees by half. Some analysts say the move could pay off if the economy goes south.

An appeals court said that Marietta, Ga.-based institution's overdraft agreements were "ambiguous" and now the case might be settled at a trial.

While bank stocks flounder, their bonds are seen as a haven against a possible recession; the senator asks bank about overdraft fees on closed accounts.

After a news report said the bank kept alive accounts customers thought they had closed, Sen. Elizabeth Warren told acting CEO Allen Parker in a letter that Wells is "still fundamentally broken."

The St. Joseph, Mich.-based institution faced claims that it didn't properly opt members in to its overdraft program.