The Consumer Financial Protection Bureau's attempts to rein inoverdraft reordering gained ammunition today when Sen. Sherrod Brown (D-Ohio), Chair of the Senate BankingSubcommittee on Financial Institutions and Consumer Protection,announced he will soon introduce legislation that would grant theCFPB legal authority over the practice.

“Banks should play by the rules instead of purposefully'reordering' their costumers' debit card transactions so that theyprofit while consumers rack up costly penalties,” Brown said in apress conference in Cleveland. “My bill would put a stop to this byempowering the Consumer Financial Protection Bureau to crack downon banks that employ predatory practices. It also would allow theCFPB to establish fair guidelines to protect consumers and thebanks and credit unions that play fair with theircustomers.”

The CFPB released a report June 11 that examined overdraft profit strategies likereordering and included statistics regarding credit union overdraftand NSF income. While the income statistics at face value appeared to be unflattering –the fees accounted for 51% of credit union fee income in 2012, and78% for community banks and thrifts – the report added thatcommunity-based institutions derive more income from the fees thanlarge banks because they serve fewer large commercial accounts andmore consumer accounts.

According to a release from Brown's office, the bill would limitoverdraft strategies by requiring institutions to post transactionsin “an objective way” that is clear to consumers; grant the CFPBthe authority to monitor overdraft practices to determine if theyare acting predatorily; and, establish guidelines that protectconsumers.

Brown's bill would also direct the CFPB to provide a safe harborfrom litigation for institutions that follow the bureau's overdraftsystem.