Nessa Feddis

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Nessa Feddis is an American attorney and banking industry spokesperson.

Contents

As senior vice president and deputy chief counsel for consumer protection and payments at the American Bankers Association's (ABA) Center for Regulatory Compliance, she focuses on consumer protection laws and payment system issues. She analyzes and instructs on various regulatory and legislative proposals and final laws related to consumer financial services including credit and debit cards, privacy, deposit accounts, payments systems, and payment system fraud prevention. She informs Congress and government agencies on these subjects. She has testified before Congress.

She is a former president of the American College of Consumer Financial Services Lawyers and former Chair of the Subcommittee on Electronic Fund Transfers of the American Bar Association's Consumer Financial Services Committee. She is also on the faculty at Practising Law Institute. [1]

Feddis' has contributed articles discussing regulatory and legislative developments in consumer banking matters to ABA Banking Journal and ABA Bank Compliance. [2]

She received her J.D. degree from Catholic University law school. [3]

Media Interviews

Feddis appeared on PBS' NewsHour with Jim Lehrer in March 2011 to discuss the Fed's proposed rule regarding interchange. She said, "Interchange is basically the merchants' contribution to creating this very valuable, available-24/7, reliable system. And that's how it started. It really was a merchant phenomenon. The merchants, or the businesses, were getting tired of the losses from when their checks were returned. So they basically agreed to pay the fee and shift those losses and the risk of those losses back to the bank. And that's what it amounts to. So, the fee covers the cost of providing this 24/7-available system. And it's reliable. It's quick. It's secure. It not only helps maintain it, but it helps improve it. That means innovation. And one of the great concerns here is that, if they don't have the money, you won't see any more innovation."

See: PBS' NewsHour with Jim Lehrer, "Banks, Retailers Clash Over Move to Cap Debit Card 'Swipe Fees'," March 8, 2011

Feddis predicted on various national news stations, including PBS' NewsHour with Jim Lehrer, and on ABC News that the Credit CARD Act would mean that credit card rates would increase generally, small businesses and consumers would find it harder to obtain credit, and limits would be lower.

Recent data show that since the credit card restrictions ultimately adopted in the CARD Act were proposed in 2008, credit card interest rates have increased and credit card credit availability has declined. In contrast, during the same period, interest rates on other types of consumer credit declined, and non-revolving, non-mortgage debt as a percent of disposable income increased, suggesting that the economy alone cannot explained the increased credit cards interest rates and reduced availability. [4]

In an interview on PBS NewsHour with Jim Lehrer she said, “The bills and the rules restrict the ability of card companies to adjust to changing environments, changing risks. Over time, the market changes. Over time, people change. And if [the credit card companies] can't adjust to that risk -- and risk equals cost -- other people have to absorb it. In other words, people who manage their credit well end up having to pay for people who don't repay their loans.”

See: PBS NewsHour with Jim Lehrer, "Senate Looks at Restraining Credit Card Companies," May 14, 2009

On ABC News she said, “Riskier borrowers pay more for loans just like riskier drivers pay more for car insurance. And the inability to price for risk means that the cost is spread out over everybody.”

See: ABC News, “Credit Card Fee Limits,” May 20, 2010

Subsequently, in another interview on PBS NewsHour with Jim Lehrer when asked whether the Credit CARD Act could mean credit cards would be more difficult for some to obtain, Ms. Feddis responded, “Congress understood when they passed this law that one of the effects would be that many people, many small businesses wouldn't be able to get credit cards as easily, accounts would be closed, limits would be lowered. They also understood that, across-the-board, interest rates would go up a bit for everybody.”

In response to the observation that this was already happening, she said, “We're seeing that in the advertised rates, the new accounts, but [Congress] also understood that people who manage their credit well will to some degree be subsidizing or paying for those who don't. But they made the decision that this was an acceptable compromise -- a tradeoff, if you will -- for the consumer protections.

A 2011 study by Argus Information & Advisory Services found that, based on cardholder data of the 9 largest credit card issuers, credit card interest rates increased and credit availability decreased since credit card restrictions ultimately adopted in the CARD Act were proposed in 2008. [5]

She also noted the positive aspects of the CARD Act, “The predominant effect of this new law is that consumers will no longer be surprised by an interest rate increase. For the most part, they will receive a 45-day advanced notice and, more importantly, the option to pay off the existing balance over time at the original rate."

See: The NewsHour with Jim Lehrer, "Tougher Credit Card Rules Offer New Consumer Guards," Aug. 20, 2009

As a banking industry representative, Feddis suggested in an interview with USA Today that the credit industry's treatment of students gives students a beneficial crash course in financial management, noting that unexpected fees may present “an opportunity to learn to manage a bank account.” [6]

See: Nessa Feddis appears on AARP's Inside E Street

A 2007 Washington Post article on banks' debit card overdraft fees quoted her testimony before a subcommittee of the House Financial Services Committee stating that paying overdrafts “helps to avoid embarrassment, inconvenience, merchant fees and other adverse consequences of having a check bounce or a transaction denied.” The article notes that she added: "Careful tracking by the customer of transactions is an important responsibility. It is even more critical today than ever before, as there are many new and convenient ways to pay for the goods and services we buy." The article also pointed out that she testified that customers should keep track of their money, “because they are in a better position to know their actual balance. Only they know about the most recent automatic payments they have authorized and debit card transactions they have approved.” [7]

The Washington Post columnist pointed out that debit card issuers could notify customers electronically, allowing them to avoid the overdraft fees. The article contended that "financial institutions don't want to change the status quo because they make good and easy money off their own customers' mistakes and irresponsibility." [7] Feddis responded that "current technology [2007] makes real-time notification [at the point of sale] of overdrafts cost-prohibitive." [7]

Feddis has also pointed out that the majority of bank customers don't pay any banking fees—including overdrafts—in a 2009 MarketWatch article. She says, “Anyone's bank account can fall short from time to time but overdraft fees are 100% avoidable. Just like a parking ticket, they're meant to be a deterrent.” [8]

In Frontline's September 2009 documentary titled The Card Game, which investigated questionable practices of the American credit card industry and the relationship of credit card abuse to the financial crisis of 2001-2010, [9] when asked about the arrogance of the banking industry, [10] [11] Feddis replied: "Well, once Congress and the regulators identified the problems, they addressed it, and the industry is moving on.

See: Excerpt, The Card Game, with Nessa Feddis

Personal

Born Nessa Eileen Feddis [3] in November 1958, Feddis is one of six daughters of Eileen and Robert Feddis, both natives of Dublin, Ireland, [12] who met while serving in the armed forces. Robert Feddis retired in 2007 as Cumberland, Maryland's first orthopedic surgeon. [13] Nessa Feddis was born in Maryland and eventually moved to Washington, D.C. where she has lived ever since.

Feddis has competed in rowing on the Potomac Boat Club team in D.C. In 1997, she won a gold [14] in the Head of the Charles Regatta Master 8s and a silver in 1998. [15]

See also

See: Nessa Feddis, photos

Related Research Articles

<span class="mw-page-title-main">Debit card</span> Card used for financial transactions, usually without a credit line

A debit card, also known as a check card or bank card, is a payment card that can be used in place of cash to make purchases. The card usually consists of the bank's name, a card number, the cardholder's name, and an expiration date, on either the front or the back. Many new cards now have a chip on them, which allows people to use their card by touch (contactless), or by inserting the card and keying in a PIN as with swiping the magnetic stripe. Debit cards are similar to a credit card, but the money for the purchase must be in the cardholder's bank account at the time of the purchase and is immediately transferred directly from that account to the merchant's account to pay for the purchase.

<span class="mw-page-title-main">EFTPOS</span> Type of electronic payment system

Electronic funds transfer at point of sale is an electronic payment system involving electronic funds transfers based on the use of payment cards, such as debit cards or credit cards, at payment terminals located at points of sale. EFTPOS technology was developed during the 1980s.

<span class="mw-page-title-main">Transaction account</span> Bank holding that clients can access on demand

A transaction account, also called a checking account, chequing account, current account, demand deposit account, or share draft account at credit unions, is a deposit account or bank account held at a bank or other financial institution. It is available to the account owner "on demand" and is available for frequent and immediate access by the account owner or to others as the account owner may direct. Access may be in a variety of ways, such as cash withdrawals, use of debit cards, cheques and electronic transfer. In economic terms, the funds held in a transaction account are regarded as liquid funds. In accounting terms, they are considered as cash.

A direct debit or direct withdrawal is a financial transaction in which one organisation withdraws funds from a payer's bank account. Formally, the organisation that calls for the funds instructs their bank to collect an amount directly from another's bank account designated by the payer and pay those funds into a bank account designated by the payee. Before the payer's banker will allow the transaction to take place, the payer must have advised the bank that they have authorized the payee to directly draw the funds. It is also called pre-authorized debit (PAD) or pre-authorized payment (PAP). After the authorities are set up, the direct debit transactions are usually processed electronically.

A chargeback is a return of money to a payer of a transaction, especially a credit card transaction. Most commonly the payer is a consumer. The chargeback reverses a money transfer from the consumer's bank account, line of credit, or credit card. The chargeback is ordered by the bank that issued the consumer's payment card. In the distribution industry, a chargeback occurs when the supplier sells a product at a higher price to the distributor than the price they have set with the end user. The distributor submits a chargeback to the supplier so they can recover the money lost in the transaction.

<span class="mw-page-title-main">Overdraft</span> Payments from a bank account exceeding the balance

An overdraft occurs when something is withdrawn in excess of what is in a current account. For financial systems, this can be funds in a bank account. In these situations the account is said to be "overdrawn". In the economic system, if there is a prior agreement with the account provider for an overdraft, and the amount overdrawn is within the authorized overdraft limit, then interest is normally charged at the agreed rate. If the negative balance exceeds the agreed terms, then additional fees may be charged and higher interest rates may apply.

A merchant account is a type of bank account that allows businesses to accept payments in multiple ways, typically debit or credit cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for the settlement of payment card transactions. In some cases a payment processor, independent sales organization (ISO), or member service provider (MSP) is also a party to the merchant agreement. Whether a merchant enters into a merchant agreement directly with an acquiring bank or through an aggregator, the agreement contractually binds the merchant to obey the operating regulations established by the card associations. A high-risk merchant account is a business account or merchant account that allows the business to accept online payments though they are considered to be of high-risk nature by the banks and credit card processors. The industries that possess this account are adult industry, travel, Forex trading business, multilevel marketing business. "High-Risk" is the term that is used by the acquiring banks to signify industries or merchants that are involved with the higher financial risk.

<span class="mw-page-title-main">Payment card</span> Card issued by a financial institution that can be used to make a payment

Payment cards are part of a payment system issued by financial institutions, such as a bank, to a customer that enables its owner to access the funds in the customer's designated bank accounts, or through a credit account and make payments by electronic transfer with a payment terminal and access automated teller machines (ATMs). Such cards are known by a variety of names, including bank cards, ATM cards, client cards, key cards or cash cards.

ATM usage fees are the fees that many banks and interbank networks charge for the use of their automated teller machines (ATMs). In some cases, these fees are assessed solely for non-members of the bank; in other cases, they apply to all users. There is usually a higher fee for use of White-label ATMs rather than bank owned ATMs.

<span class="mw-page-title-main">Interchange fee</span> Fee paid between banks for card-based transactions

Interchange fee is a term used in the payment card industry to describe a fee paid between banks for the acceptance of card-based transactions. Usually for sales/services transactions it is a fee that a merchant's bank pays a customer's bank.

An issuing bank is a bank that offers card association branded payment cards directly to consumers, such as credit cards, debit cards, contactless devices such as key fobs as well as prepaid cards. The name is derived from the practice of issuing cards to a consumer.

<span class="mw-page-title-main">Credit card</span> Card for financial transactions from a line of credit

A credit card is a payment card, usually issued by a bank, allowing its users to purchase goods or services or withdraw cash on credit. Using the card thus accrues debt that has to be repaid later. Credit cards are one of the most widely used forms of payment across the world.

<i>Office of Fair Trading v Abbey National plc</i>

Office of Fair Trading v Abbey National plc and Others[2009] UKSC 6is a judicial decision of the United Kingdom Supreme Court relating to bank charges in the United Kingdom, with reference to the situation where a bank account holder goes into unplanned overdraft.

<span class="mw-page-title-main">Bank</span> Financial institution which accepts deposits

A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.

<span class="mw-page-title-main">Banking in Germany</span>

Banking in Germany is a highly leveraged industry, as its average leverage ratio as of 11 October 2008 is 52 to 1 ; its short-term liabilities are equal to 60% of the German GDP or 167% of its national debt.

<span class="mw-page-title-main">Credit CARD Act of 2009</span>

The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 is a federal statute passed by the United States Congress and signed by U.S. President Barack Obama on May 22, 2009. It is a comprehensive credit card reform legislation that aims "to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes." The bill was passed with bipartisan support by both the House of Representatives and the Senate.

Unfair, Deceptive, or Abusive Acts or Practices is a proposal for bank regulation in the United States under Federal Reserve Regulation AA. The Board of Governors of the Federal Reserve System announced in a press release on Saturday, May 2, 2008, that the proposed rules, "prohibit unfair practices regarding credit cards and overdraft services that would, among other provisions, protect consumers from unexpected increases in the rate charged on pre-existing credit card balances." Provisions addressing credit card practices aim to enhance protections for consumers who use credit cards and improve the credit card disclosures under the Truth in Lending Act:

Venmo is an American mobile payment service founded in 2009 and owned by PayPal since 2013. Venmo is aimed at users who wish to split their bills. Account holders can transfer funds to others via a mobile phone app; both the sender and receiver must live in the United States. Venmo also operates as a small social network, as users can observe other users' public transactions with posts and emoticons. In 2021, the company handled $230 billion in transactions and generated $850 million in revenue. Users can view transactions on the Venmo website but cannot complete transactions on the website.

<span class="mw-page-title-main">Chime (company)</span> American financial services company

Chime Financial, Inc. is a San Francisco–based financial technology company that partners with regional banks to provide certain fee-free mobile banking services. The company offers early access to paychecks, negative account balances without overdraft fees, high-yield savings accounts, peer-to-peer payments, and an interest-free secured credit card. Chime earns the majority of its revenue from the collection of interchange fees on debit card transactions.

Current is an American financial services and software development company (FinTech) based in New York City. It provides mobile banking services through its partner bank, Choice Financial Group.

References

  1. "Faculty Profile, Nessa Feddis". Practising Law Institute.
  2. Feddis bio from Speaker Biographies, National Conference of State Legislators, 2009 conference.
  3. 1 2 "Nessa Eileen Feddis". American College of Consumer Finance Services Lawyers.
  4. "ABA Comment on Request for Information on Credit CARD Act's Impact" (PDF). ABA.
  5. "The CARD Act - One Year Later: Recent Trends in the Credit Card Industry" (PDF). Argus Information & Advisory Services.
  6. "Don't bank on your bank to help". Allison Rowe, The Daily Evergreen, 10/22/2009.
  7. 1 2 3 "They Want You to Go Over Your Debit Limit". The Washington Post, Michelle Singletary, July 19, 2007. July 19, 2007. Retrieved May 20, 2010.
  8. "Avoiding overdrafts: Consumers are learning their lessons on the pricey fees". MarketWatch, Jennifer Waters, Sept. 19, 2009. Sep 19, 2009. Retrieved Oct 21, 2010.
  9. "In Love Affair With Credit, It's Business as Usual". The New York Times, Eric Mink, November 23, 2009. November 24, 2009. Retrieved May 20, 2010.
  10. Interview: Nessa Feddis, Frontline, THE CARD GAME, Sept. 15, 2009
  11. "The Card Game: New Doc Investigates History of Credit Card Industry and Proposals for Reform". Democracy Now, November 18, 2009.
  12. "Art from Around the Globe Adorns this Artful Home". Allegany Arts Council.
  13. "There Comes A Time". The Cumberland Times-News, Jeffrey Alderton, Sep 26, 2007.
  14. "Head of the Charles Regatta Results, October 19, 1997 Cambridge, MA". CoolRunning.com. 12 January 2021.
  15. "Head of the Charles Regatta Master 8 Women Results, 1998". horc.org.