CFPB Seeks Second Bite at Overdraft Apple
Banks and credit unions might have believed that they had settled, at least for the time being, the question over how much they charged for checking account overdrafts, but the Consumer Financial Protection Bureau has decided to take a second look at the issue.
“With today’s technologies, consumers have more opportunities to access their checking accounts and cause overdrafts,” said CFPB Director Richard Cordray. “But overdraft practices have the capacity to inflict serious economic harm on the people who can least afford it. We want to learn how consumers are affected, and how well they are able to anticipate and avoid paying penalty fees.”
The regulator cited data from 2011 that showed overdraft fees ranged between $30 and $35 in 2011 and a 2008 Federal Reserve study which found that account holders who overdrew their accounts 20 times a year paid $1,610 in fees.
The agency noted the 2010 law which limited overdraft protection program to those consumers who actively chose to use the protection, but did discuss its impact on the overdraft issue.
As part of its inquiry into overdraft fees, the agency said it had requested data from some banks on their overdraft practices. The agency did not mention CUs.