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Journal Article
Comment sought for charging fees on all daylight overdrafts
Report
Price-increasing competition: the curious case of overdraft versus deferred deposit credit
We find that banks charge more for overdraft credit when depositors have access to a potential substitute: deferred deposit ("payday") credit. We attribute this rise in prices partly to adverse selection created by banks' practice of charging a flat fee regardless of the overdraft amount--pricing that favors depositors prone to large overdrafts. When deferred deposit credit priced per dollar borrowed is available, depositors prone to small overdrafts switch to that option. That selection works against banks; large overdrafts cost more to supply and, if depositors default, banks lose more, ...
Discussion Paper
Consumer testing informs policy: overdraft regulation as a case study
In November 2009, the Board of Governors of the Federal Reserve System issued regulations that protect consumers from being charged certain fees when, under a discretionary overdraft service, financial institutions pay transactions from a deposit account that contains insufficient funds. Under the regulations, consumers must receive notices that explain any discretionary overdraft services offered to them by their bank. In addition, consumers may not be charged overdraft fees for ATM or one-time debit transactions unless they have opted in to this service. During the rulemaking process, the ...
Journal Article
Comment sought for charging fees on all daylight overdrafts
Journal Article
New rules aim to clarify overdraft information
New amendments to Regulation DD address how banks inform their customers about bounced-check protection services.
Journal Article
Daylight overdrafts and payments system risk