77th Annual Meeting


WHEREAS, the U.S. Conference of Mayors is committed to helping connect families to long term asset building opportunities and to reducing the high cost of being poor; and

WHEREAS, 18.5 million U.S. households currently have neither a checking nor savings account and 21.6 million households are considered underbanked. These households are concentrated mostly in low-income, urban, mostly-minority communities; and

WHEREAS, cities throughout the country have created innovative strategies to expand access to safe and affordable banking products for low income households; and,

WHEREAS, a major deterrent to banking are unanticipated, burdensome overdraft protection fees; and

WHEREAS, consumers spent more than $17.5 billion on "courtesy" fee-based overdraft in 2006; and

WHEREAS, nearly half of fee-incurring overdraft transactions occurred at ATM or debit terminals and were approved by the financial institution without warning the customer they would pay a charge; and

WHEREAS, the burden of these fees is concentrated on the least financially stable, with 16 percent of overdraft users paying 71 percent of the fees and repeat users most often low-income, single, non-white renters; and

WHEREAS, the Consumer Overdraft Protection Fair Practices Act:

    a) Requires consumer consent before banks or credit union can permit fee-based overdraft loans; and b) Requires banks to warn customers if an electronic transactions will trigger an overdraft loan fee and allow the consumer to cancel the transaction; and c) Clarifies that overdraft fees are considered finance charges under the Truth in Lending Act, allowing consumers to compare the costs of borrowing from the bank to other sources of cash advances; and d) Prohibits banks from manipulating the order in which checks are processed if that would increases overdraft fees;

WHEREAS, the Consumer Overdraft Protection Fair Practices Act will ensure that consumers are treated fairly by financial institutions, help to restore confidence in the banking system and encourage unbanked and underbanked Americans to deposit funds and begin to meaningfully use the mainstream financial system;

NOW, THEREFORE, BE IT RESOLVED, the United States Conference of Mayors affirms its support for the Consumer Overdraft Protection Fair Practices Act and calls upon the United States Congress to enact it in the 111th Congress.