WASHINGTON — The Center for Responsible Lending, an affiliate of the $262 million Self Help Credit Union, has issued a report that charges banks and credit unions are hurting consumers with costly overdraft loans tied to debit card transactions.
The Center's report, Debit Card Danger, recommends that financial institutions be required to notify consumers when a debit transaction will send their checking account into an overdraft status and to give them a chance to not complete the charge.
"What banks are calling 'bounce protection' is starting to look more like a 'protection racket,'" said Eric Halperin, director of CRL's Washington office and a co-author of the report. "Banks are raking in fees from unwitting customers who would not overdraft if given a choice."
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