FDIC determines the overdraft facility payment application control-out sought public comment

Press Releases
FDIC set out the overdraft facility fee program guidance
Is sought public comment

AS SOON AS THE PUBLICATION OF THE
11 August 2010

The Federal Deposit Insurance Corporation, proposed today the public comment how banking institutions it controls instructions would be to implement and maintain automated overdraft programs robust control.

The proposal focuses on primarily to find effective ways to banks to monitor the overdraft facility programmes on an excessive or chronic clients ' short-term, highly cost credit instead of as a form, its intended use: protection against inadvertent overdrafts. It also provides an overview of how banks can avoid compliance and security and stability risks.

"These guidelines propose common sense ways to reduce the risks to consumers and banks.Ensure that customers are trained on correct use of the overdraft programs is just one more example of how community banks and their customers understand the role helps individuals to find suitable financial products, "said FDIC Chairman Sheila c. Bair.

According to the new rules (regulation e) that came into force banking institutions already recently is to provide customers the opportunity to opt-in programs that charged for ATM and estimated point-of-sale overdrafts.

The proposed guidelines from the FDIC's in November 2008 Study of the bank overdraft programs, which are set out in the growing use of overdraft fee programmes in the field of financial services and consumer complaints spike, FDIC, overdraft protection programme, almost double the number of the 2008 and 2009.

Sandra l. Thompson, Director of the FDIC solution, control and consumer protection, said: "the overdraft facility programs are not intended for use as the source of credit on a regular basis. than.Overdrafts by relying on may cause significant and unnecessary costs and risk of the banking institution's reputation of consumers. "

"Overdraft facility on their current account overdraft charges can exceed the amount of benefit, and may be present several times on the same day, event, and clear policies depending on the type of institution.When costs are very high compared to the overdraft facility of the benefit or when two major product is allowed, the result is often the customer dissatisfaction and the institution providing the product, "Thompson said."Useful and appropriate by providing information and offering consumers the sensible options and settings in the short-term credit option can be mutually beneficial for the institutions, and consumers. "

Comments may be submitted to the Court of 27 September 2010.

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Annex:
Financial institution letter overdraft fee programs and the consumer, in PDF.(PDF-help)

Congress created the Federal Deposit Insurance Corporation to restore the public's confidence in the nation of the banking system of the 1933. deposits FDIC takaatte successful nation 8,012 banks and savings associations and it contributes to the stability and security by identifying, monitoring and deal with risks for which they are exposed to the FDIC may not. federal tax dollars – the insured financial institutions to finance their activities.

FDIC press releases and other information is electronically available on the Internet at www.fdic.gov order (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained from the FDIC's Public Information Center (877-275-3342 or 703-562-2200).PR-186-2010