In a continued tightening of oversight on the financial sector, Washington is considering passing broad legislation that will limit the types and amounts of fees that banks can levy against customers.

In an attempt to stave off the legislation,  Bank of America, J.P. Morgan Chase & Co., and Wells Fargo & Co. have announced that they will eliminate overdraft fees for customers when they overdraw their accounts by $5 or less .  In addition the banks will impose no more than four overdraft fees per day.

I've written several posts on this issue and am glad that this issue is finally getting some air time.  I first wrote about this over a year ago when I discovered that banks routinely allow consumers to make debit purchases when there isn't enough money in the checking account to cover the purchases.  The most recent post was a discussion on the ungodly profits that banks are making from overdraft and other hidden and sneaky fees.

As a debt consultant, I have a healthy dislike for the practices of the banking industry.  The stories that I hear on a daily basis would curl your toes.  I have strong consumer advocate leanings and I absolutely agree that the banking sector needs to be reigned in.  The predatory practices are crushing the middle class and hurting our economy in the pursuit of stockholder profits.

Frankly, I'm in favor of smaller regional banks.  I would have preferred to see Citi and other monster banks that were deemed too large to fail, fail. 

That said, I've also learned that our current Congressional Leadership have a tendency to pass feel good legislation that ultimately hurts the consumer more than it helps.  The recent passage of the Credit Protection Act, has caused minimum payments to increase and have caused many consumers to reach a tipping point and is pushing many into Bankruptcy or default.  The significant issue of Universal Default was never addressed and we now get to carry guns in National Parks.

Common sense regulation/legislation that benefits both consumers and banks is needed.  I favor legislation that will emphasis education and gives the consumer true choice!  The underhanded sneaky practices must be stopped as they benefit no one!

How and if that will be accomplished remains to be seen.  Stay tuned - this issue isn't going away soon.

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I am Kate Bourland. I help my clients get out of debt, get loan modifications and establish a debt free lifestyle. We Guarantee our Loan Modifications. You can reach me at 530-419-3967.

http://www.katebourland.com