Democratic Congresswoman Carolyn Maloney of New York sent a letter to Director Cordray yesterday urging the CFPB to limit overdraft fees and expand opt-in requirements as part of a proposed overdraft rule.
In calling for overdraft fee limits, Ms. Maloney referenced the report issued by the CFPB this past July which found a median overdraft fee of $34 and a median amount of debit card transactions leading to an overdraft fee of $24. She also referenced the CFPB’s statement in its press release accompanying the report that “If a consumer were to borrow $24 for three days and pay a $34 finance charge, such a loan would carry a 17,000 percent APR.” According to Ms. Maloney, “in light of the data in the Bureau’s report,” the CFPB should require by rule that all overdraft fees be “reasonable and proportional” to the amount of the overdraft.
Ms. Maloney also urged the CFPB to expand opt-in requirements so they also apply to checks and ACH transactions. She indicated that the CFPB’s finding that overdraft and NSF fees constituted 41 percent of the total checking account fees of consumers who had not opted in to overdraft protection demonstrates the need to expand the current Reg E opt-in requirement.
As we recently reported, while overdraft rulemaking by the CFPB appears increasingly likely, it does not appear to be imminent. In its latest rulemaking agenda, the CFPB gave a February 2015 timetable for further “prerule activities” relating to overdraft practices.