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Proposed Debit Card Regulations Could Cause 1,000 Banks and 2,000 Credit Unions to Fail

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Proposed legislation by Rep. Carolyn Maloney (D-NY) would require notice be given to customers at the ATM or point-of-sale terminal when a purchase is about to trigger an overdraft – and would give consumers at the transaction point a choice of whether to accept or reject the overdraft service and the associated fee. "According to Michael Moebs, an economic advisor for many banks and credit unions, Rep. Maloney’s legislation would effectively kill overdraft services, which could cause up to 1,000 banks and 2,000 credit unions to fold within the next two years," American Banking News reported. Why? Because 45% of banks collect more in overdraft fees than they make in profits.