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This article has been revised to reflect the following correction:
Correction: June 19, 2013
An earlier version of this article referred imprecisely to a lender that was not found to have failed on any of the metrics. It is ResCap, the mortgage subsidiary of Ally Financial, not Ally Financial itself.
Overdraft penalties represent well over half of banks’ fees from consumer checking accounts, a new report from the Consumer Financial Protection Bureau finds.
The report, based in part on confidential data provided by some of the nation’s larger banks, estimated that 61 percent of bank fees from consumer accounts were for overdrafts and insufficient funds, penalties charged when customers spent more than their accounts had available. Based on that finding, the bureau said it estimated conservatively that the banking industry earned $12.6 billion in such fees from consumers in 2011.
The report represents preliminary findings of a bureau inquiry into bank overdraft practices announced early last year. The bureau is not making any policy recommendations yet, but says it will conduct further reviews of account-level data.
The report found that overdraft protection can be very expensive for consumers and varies widely from bank to bank. Overdraft protection is a service in which the bank pays the amount in question, even though the account lacks the necessary funds, but then charges the customer a fee for doing so. The average customer overdrawing an account paid $225 in charges per year, the study found. And more than a quarter (27 percent) of checking accounts paid at least one overdraft charge in 2011.
The bureau did not identify the banks included in the report or even specify how many were included in the analysis, which also incorporated comments submitted by the public, consumer advocates and industry groups. The bureau said, however, that the banks in the study represented more than half of all deposit accounts. The bureau has supervisory authority over banks with more than $10 billion in assets, or more than 100 institutions.
Since the middle of 2010, the Federal Reserve has barred banks from charging overdraft fees for A.T.M. withdrawals or most debit card transactions unless a customer actively chooses the service. The report found that customers who accept the coverage were more likely to end up paying higher fees and were more likely to end up having their account involuntarily closed than those who did not.
“What is marketed as overdraft protection can, in some instances, put consumers at greater risk of harm,” said Richard Cordray, the bureau’s director, in prepared remarks.
Opt-in rates vary widely among banks, suggesting that bank marketing of the service plays a role. At some banks in 2011, more than 40 percent of new customers opted in, while fewer than 10 percent did so at other banks.
Mr. Cordray said the findings did not indicate that banks should not charge overdraft fees. “Nonetheless,” he said, “our findings raise concerns about the number of consumers who are incurring heavy overdraft fees or account closures, and the wide variations across institutions indicate that certain practices and procedures merit further analysis.”
Have you paid overdraft fees? Do you think new rules are necessary to regulate banks’ use of them?
Jack Ewing contributed reporting.
There are a lot of similarities between lawyering and rodeoing, says Katie Woods, an assistant district attorney in Tarrant County, Texas.
"You're always sizing up your competition. … You want to know what you're up against to be successful in what you're doing," says Woods, who says her rodeo background also helps her in voir dire because she knows how to make a jury like her -- "[m]uch like you want a horse to trust you and follow you wherever you want to go," she says.
At the height of her rodeo career, Woods traveled frequently to amateur and professional-level rodeos and won big purses in barrel races -- riding a horse in a clover pattern around three barrels in an arena.
She became a local rodeo queen. She later was the third runner-up in a statewide rodeo queen competition hosted by the Professional Rodeo Cowboys Association in California, where she grew up.
Then in 2004, Woods became Miss Rodeo USA for the International Professional Rodeo Association by winning a weeklong competition in the areas of etiquette, public speaking and horsemanship, among other things.
When her third year of law school at Texas Wesleyan University School of Law rolled around, Woods stopped traveling to rodeos and focused on school. She earned her law degree in 2010 and later that year she joined the Tarrant County DA's office, where she prosecutes misdemeanors in Tarrant County Court-at-Law No. 6.
But Woods will never give up rodeoing. She's on a team that competes in ranch rodeos, which focus on techniques like roping, tying and sorting cattle. In the near future, she hopes to resume barrel racing at smaller rodeos in Texas.
"It's my one getaway from the rest of life. When I'm horseback, I don't think about anything else going on in my life," Woods says.
This article first appeared on Texas Lawyer's Tex Parte blog.
Despite law firms' efforts to promote diversity, results of a new survey of women and minorities at New York firms "paint a picture of stagnation," according to the New York City Bar's sixth Diversity Benchmarking Report. The study, which reported data for 2011, is based on the responses of 74 law firms that were signatories to a city bar statement of diversity principles.
"While new hires across levels are more diverse than attorneys at signatory firms, elevated turnover for women and minorities continues to erode the gains," the report said, noting there are higher turnover rates at every level for women lawyers compared to men and higher turnover for minority attorneys compared with whites. "Elevated turnover rates contribute to the creation of a 'leaky faucet' of talent for diverse attorneys."
Women continue to improve their representation at the partner level, reaching a new high of 18.3 percent in the 2011 results, while simultaneously declining among associate ranks. The study found that firms with more women on their management committees are generally more diverse firm-wide.
Minority attorney representation at the firms rose slightly in 2011, to 17.2 percent from 16.6 percent in 2010, but failed to reach the 2009 high of 18.1 percent, the report said. In particular, the percent of Hispanic and Asian attorneys increased in 2011 after declining from 2010. Meanwhile, the representation of black attorneys declined last year.
"The numbers presented in this report demonstrate a slow rate of change and indicate that many firms may need to reassess how they go about creating a workforce that better reflects our society," Carey Dunne, the city bar's president and a partner at Davis, Polk & Wardwell, said in a statement.
Jim Ewing, at right, stands at the summit of Russia's Mount Elbrus in 2004 with Atlanta trial lawyers Ken Canfield, left, and Dave Schaeffer.
Jim Ewing works with a small file called a riffler on the face of a heart sculpted from Carrera marble.After graduating in 1973 from the U.S. Naval Academy with an aerospace engineering degree, serving five years in the U.S. naval fleet service and earning a law degree from the University of Virginia School of Law in 1981, Jim Ewing has done a few things:
- established an intellectual property practice;
- climbed an 18,000-foot mountain; and
- created a gargoyle.
He's now working on another gargoyle, chipping away at a piece of Tate marble.
Ewing, who calls himself a "lifer" at Kilpatrick Townsend, spends most of his time these days in the firm's office in Menlo Park, Calif., working with the firm's Silicon Valley IP lawyers in the medical devices field.
His last big mountain climb was in 2004, the same year he took up sculpting. Mountain climbing, he says, is "a dormant passion" -- he's too busy in Silicon Valley to be traipsing around the world in hiking boots.
But through all these peaks and valleys he still has time for making beautiful things out of pieces of stone. And one day, he says, he will climb again.