A new blog post by Gary Stein, CFPB Deposits Market Program Manager, suggests four ways consumers can avoid overdraft and NSF fees. The post appears to have been prompted by the release of 2015 data by the Federal Financial Institutions Examination Council.
The blog post provides various statistics on consumer overdraft and NSF fee revenues of the banks that, beginning in 2015, were required to break out overdraft and NSF fee revenue on their call reports. For example, the blog post indicates that consumer overdraft and NSF fees reported for 2015 “represented 65.3% or almost two-thirds of all reported consumer deposit account fee revenues.”
In the blog post, the CFPB states only that it is “currently looking closely at overdraft practices and will continue to analyze this data to better monitor and understand overdraft programs in the market and the consumer experience.” However, based on the CFPB’s policy priorities released yesterday, it appears the CFPB has decided to move forward with overdraft rulemaking. The CFPB stated in the policy priorities that it “will initiate a rulemaking process with the goal of developing rules to make the overdraft market fairer and more transparent.”
The CFPB’s coupling of advice to consumers on avoiding overdraft and NSF fees with data about bank revenues carries the strong suggestion that the CFPB believes banks are deriving too much revenues from such fees. If so, it is an ominous sign for industry.