Consumer Financial Protection Bureau (CFPB) Hits Overdraft Fees
The Consumer Financial Protection Bureau (CFPB) has started a push to press down, or even eliminate, overdraft fees. A decision against the banks could cost them tens of millions of dollars in profits.
The agency management stated:
Today, the Consumer Financial Protection Bureau (CFPB) released a report on bank and credit union overdraft practices that raises concerns about whether the overdraft costs on consumer checking accounts can be anticipated and avoided. The report shows big differences across financial institutions when it comes to overdraft coverage on debit card transactions and ATM withdrawals, drawing into question how banks sell this account feature. The report also finds that consumers who opt in for overdraft coverage end up with more costs and more involuntary account closures.
"Consumers need to be able to anticipate and avoid unnecessary fees on their checking accounts. But we are concerned that overdraft programs at some banks may be increasing consumer costs," said CFPB Director Richard Cordray. "What is often marketed as overdraft protection may actually be putting consumers at greater risk of harm."
The full CFPB Study of Overdraft Programs report is available here.
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