Bill > HR1261

This bill, the Overdraft Protection Act of 2013, aims to establish fair and transparent practices for overdraft coverage programs offered by banks and other financial institutions, which are essentially short-term loans provided when a consumer's transaction account (like a checking account) doesn't have enough funds to cover a withdrawal or debit. The bill addresses concerns that some institutions aggressively push consumers towards expensive overdraft options, charging high, flat fees for each overdraft, even for small amounts, and sometimes multiple times a day, which can disproportionately burden lower-income individuals. To combat these practices, the bill mandates clear disclosures to consumers about overdraft fees, requires consumers to opt-in in writing before being charged for overdrafts on ATM and point-of-sale transactions, and limits the number of overdraft fees a consumer can be charged per month and year. It also requires overdraft fees to be reasonable and proportional to the overdraft amount, and prohibits charging overdraft fees for certain transactions like those solely due to debit holds or for ATM and debit card transactions that result in a nonsufficient fund fee (a fee for a declined payment). Furthermore, the bill includes provisions for studying and potentially regulating overdraft practices on prepaid cards and imposes a temporary moratorium on increasing overdraft fees upon enactment.