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Letter to the Honorable Richard Cordray, Director, U.S. Consumer Financial Protection Bureau


Location: Washington, DC

Today, Congresswoman Shelley Berkley called on the U.S. Consumer Financial Protection Bureau (CFPB) to crack down on loopholes that have left middle-class families in Nevada at risk of outrageous bank overdraft fees.

"Once again, Wall Street bankers are trying to pull the wool over the eyes of Nevada's middle-class families. I voted to establish the Consumer Financial Protection Bureau in order to rein in Wall Street. Now I call on the CFPB to fully use its authority to immediately require all banks to act transparently and honestly so cash-strapped, middle-class families aren't unknowingly gouged if they spend a little more at the grocery store than they expected," said Berkley in a letter to Richard Cordray, Director of the CFPB (full text below).

In 2010 the Federal Reserve required banks to get account holders' consent before enrolling in overdraft "protection" programs that could cost them $35 each time they used a debit card and overdrew their accounts. But an alarming recent study of the nation's largest banks by the Pew Charitable Trusts showed that banking customers are still being left in the dark when it comes to overdraft fees and that banks routinely provide no warning of insufficient funds to their customers.

The Pew study ( found that big banks are finding ways around the Federal Reserve rule, and often use confusing and misleading language on disclosure forms so they can steer customers to sign-up for expensive overdraft "protection" programs they may not want or need. The study found that the median length of disclosure forms containing fee information runs to a full 69 pages for the big banks.

In her letter to the Director of the CFPB, Richard Cordray, Berkley calls on the agency to require banks to simplify disclosure forms so customers may make informed decisions on whether to sign up for overdraft programs. The full text of the Berkley letter to the CFPB appears below:

June 26, 2012
The Hon. Richard Cordray
U.S. Consumer Financial Protection Bureau
1700 G Street N.W.
Washington, D.C. 20052

Dear Director Cordray:

I want to inform you of my concern over a banking industry practice that is impacting middle-class families across Nevada and the nation. Currently, many banks are engaging in predatory tactics by taking advantage of a seemingly innocent program: overdraft protection.

In 2010, the Federal Reserve put into place rules that required banks to obtain their customers' permission before enrolling them in costly overdraft "protection" programs that account holders often didn't need or want in the first place. These "protections" can cost consumers a fee of up to $35 each time their debit cards are used to overdraw their accounts.

However, an alarming study by Pew Charitable Trusts now finds that banks often skirt these rules by using confusing, misleading and overly lengthy language on their disclosure forms in order to sign-up customers for these programs. The median length of bank disclosure forms containing fee information now runs to 69 pages. To confuse the customer further, banks often use multiple different names when referring to overdraft fees. This is unacceptable.

I know the CFPB has put forth effort, under your direction, to deal with this issue. I now ask that the Bureau act as quickly as possible to crack down on confusing, misleading, and overly lengthy disclosure forms, and require banks to simplify disclosure forms and bring transparency to overdraft protection programs.

Thank you and I look forward to your prompt consideration of this issue of importance to the finances of middle-class families across Nevada and the country.


Member of Congress

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