Senator Booker Inquires Into Bank Overdraft Protection Programs

On Monday, July 17, 2017, Sen. Cory Booker (D-NJ) sent a letter to 13 banks inquiring about their overdraft programs. “I’m concerned that too many of our nation’s banks are increasingly driven to accumulate these [overdraft] fees, rather than pursue a business model that serves their communities, and are adopting certain practices to drive participation in so-called ‘overdraft protection’ programs,” Sen. Booker said in the letter.


He requested each bank provide the following:

  • How much revenue the institution generated from overdraft and NSF fees from 2014-2016;
  • The proportion of overdraft and NSF fee revenues to all other revenues from 2014-2016;
  • Whether the institution’s Board of Directors ever set or reviewed targets for increasing revenue from overdraft and NSF fees. If so, he asked the banks to provide all appropriate directives, reports, meeting minutes, or other relevant documentation;
  • For new account openings, the number of consumers who opted in to overdraft programs, and the number of those who declined or have not opted in, as well as the annual data from 2014-2016;
  • For new account openings opened online, the way consumers opt-in or decline participation in overdraft programs. He also requested any appropriate screenshots describing fees and policies, as well as the way consumer opt in or decline;
  • For new account openings in bank branches or through other in-person interactions, the method by which consumers opt-in or decline participation in overdraft programs, including samples of forms and disclosures provided to consumers, as well as any relevant employee training materials and scripts;
  • Whether the institution engaged in non-sequential debit card transaction processing. If so, whether the institution previously processed transactions sequentially, and the date when the policy changed;
  • Instances in which executives or senior managers evaluated or gave bonuses based on the number or percentage of accountholders opting into overdraft programs from 2014-2016, as well as their titles;
  • Instances in which branch managers evaluated or given bonuses based on the number or percentage of accountholders opting into overdraft programs from 2014-2016;
  • Whether the bank’s management and board formally reviewed the results of the FDIC’s Small-Dollar Lending pilot, along with any relevant documentation; and
  • Whether an institution offered a small-dollar credit product generally available to account holders eligible for overdraft protection products, as well as any relevant product.