Banking

CFPB transfers to inspect banks’ overdraft programs

As part of a pilot guidance effort, the CFPB has actually inquired on overdraft and non-sufficient funds practices from “over 20 institutions” that it has actually recognized as having a greater share of regular overdraft users or greater typical costs. The bureau signified in an article today it means to “use this information for further examination and review” and to “share this information with other regulators,” however not make the info public.

Specifically, the CFPB is asking the organizations to supply information on: the overall yearly dollar quantity customers get in overdraft protection compared to the quantity of costs charged; the yearly dollar quantity of overdraft costs charged per active bank account; the yearly quantity of NSF costs charged per active bank account; the frequency of regular users of overdraft; and the share of active bank account that are decided into overdraft programs for ATM and one-time debit deals.

This marks the most recent effort by the bureau under Director Rohit Chopra’s management to target genuine bank overdraft programs, which are currently based on robust disclosure and regulative requirements. In an op-ed released this past April, American Bankers Association President and CEO Rob Nichols highly condemned the bureau’s efforts to assault overdraft offerings and other fee-based bank services and products. In addition, current ABA/Morning Consult research study discovered that customers desire access to overdraft, with 89% stating they discover their bank’s overdraft security important, and 3 in 4 who have actually paid an overdraft charge in the previous year stating that, they were grateful their bank covered the payment instead of returning or decreasing it.

Gabriel

A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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