Project

Consumer Finance

Pew conducts research on checking account practices and advocates for better policies to help consumers manage their everyday finances.

In 2010, Pew began performing regular reviews of disclosure, overdraft, and other practices at the largest U.S. banks. These studies found that policy disclosures were often lengthy and complex, that overdraft practices such as charging high fees and changing transaction order generally put customers at risk, and that consumers were not properly informed of their right to opt out of debit card overdrafts.

Pew continues to work with policymakers and other stakeholders to ensure that overdrafts are used only occasionally when a customer makes a mistake, rather than as a frequent and costly form of credit. In particular, Pew advocates for regulatory changes to enable banks and credit unions to develop new types of small-dollar installment loans that can expand access to safe, affordable credit for the millions of consumers who routinely use overdraft as a way to borrow money or who rely on high-cost credit products from nonbank lenders, such as payday loan stores.

Article

Bank Regulators Set to Make Big Decisions About Small Loans

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Article

Bank Regulators Set to Make Big Decisions About Small Loans

The nation’s three federal bank regulators—the Federal Deposit Insurance Corp. (FDIC), Federal Reserve Board, and Office of the Comptroller of the Currency (OCC)—have agreed to pursue joint action on small-dollar lending, according to FDIC Chairman Jelena McWilliams.

Article

Overdraft: The Need for New Rules

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Article

Overdraft: The Need for New Rules

Checking accounts are the most widely used financial product in the country. Yet poorly regulated bank overdraft practices continue to cause consumers to unknowingly incur multiple costly fees for a single transaction. Pew is promoting new rules to make overdraft programs safer and more transparent.

Article

Millions Use Bank Overdrafts as Credit

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Article

More than 39 million American adults incurred at least one fee for overdrawing their bank account or having insufficient funds in the past 12 months, according to an analysis of survey data by The Pew Charitable Trusts. Most of these consumers, known as overdrafters, view bank overdraft programs as a way to ensure that payments will go through if checking account balances are low. But almost a third—representing more than 12 million people—said doing so is a way to borrow when short on cash.

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Issue Brief

Standards Needed for Safe Small Installment Loans From Banks, Credit Unions

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Issue Brief

Standards Needed for Safe Small Installment Loans From Banks, Credit Unions

Several recent developments have raised the possibility of banks and credit unions offering small installment loans and lines of credit—which would provide a far better option for Americans, who currently spend more than $30 billion annually to borrow small amounts of money from payday, auto title, pawn, rent-to-own, and other small-dollar lenders outside the banking system. Consumers use these high-cost loans to pay bills; cope with income volatility; and avoid outcomes such as eviction or foreclosure, having utilities disconnected, seeing their cars repossessed, or going without necessities. Many of these loans end up harming consumers because of their unaffordable payments and extremely high prices; in the payday and auto title loan markets, for example, most borrowers pay more in fees than they originally received in credit.

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