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The CFPB has released a new issue of Supervisory Highlights that carries the title “Junk Fees Update Special Edition.”  The report discusses the CFPB’s examinations involving fees in the areas of deposits, auto servicing, and remittances  that were generally completed between February 2023 and August 2023.   The report updates the CFPB’s “Junk Fees Special Edition” of Supervisory Highlights issued in March 2023. … Continue Reading

The CFPB and the OCC announced that they have each entered into a consent order with Bank of America, N.A. for alleged violations arising from the Bank’s representment fee practices (“Fee Consent Orders”).  The CFPB also announced that it has entered into a second consent order with the Bank for alleged violations arising from certain of the Bank’s credit card-related practices. … Continue Reading

The Consumer Bankers Association has released the results of a national survey that looked at how consumers value banking services and innovation.  The survey was conducted in February 2023 and included 1,197 adults across the U.S., representative by geography, age, gender, education level, and race.

Key survey results included the following:

  • 83% of respondents believe banks are doing a good job helping them avoid scams.
… Continue Reading

In light of ongoing events concerning the recent bank failures and the response of regulators, we are releasing this week’s podcast episode earlier than our regular Thursday release date. 

After reviewing the circumstances leading to the failure of SVB and historic parallels, we discuss the merits of the regulators’ decision to invoke the Systemic Risk Exception and protect all SVB deposit accounts, notwithstanding the $250,000 FDIC insurance limitation, alternate approaches that regulators might have considered for protecting uninsured funds, and the Fed’s creation of the Bank Term Funding Program to make available additional funding to eligible depository institutions. … Continue Reading

On October 26, 2022, President Biden appeared at the White House with Rohit Chopra, CFPB Director, and Lina Khan, FTC Chair, to announce that his Administration is taking action to eliminate all “junk fees,” such as fees for deposited checks that are returned unpaid, surprise banking overdraft fees, hidden hotel booking fees and termination charges to stop people from changing cable plans. … Continue Reading

The FDIC has issued new supervisory guidance (FIL-40-2022) on multiple non-sufficient funds (NSF) fees arising from the re-presentment of the same unpaid transaction.  The guidance directly applies only to state-chartered banks and thrifts that are not members of the Federal Reserve System.  National banks and federal thrifts are supervised by the Office of the Comptroller of the Currency (OCC) and state-chartered banks that are members of the Federal Reserve System are supervised by the Federal Reserve Board (FRB). … Continue Reading

Just one day after announcing that it was launching a new system to provide guidance to other agencies with consumer financial protection responsibilities on how the CFPB intends to enforce federal consumer financial laws, the CFPB released its first Consumer Financial Protection Circular (2022-02) addressing deceptive representations involving the FDIC’s name or logo or deposit insurance. … Continue Reading

A California Court of Appeal recently found a bank liable to a judgment creditor under California’s Enforcement of Judgments Law for the bank’s registered agent’s mistake in misreading, and subsequently rejecting, a notice of levy.  Although the bank itself did not have knowledge of the mistake, the Court held the bank responsible through principles of agency, rendering the bank liable for amounts that the account holder drained from the account when the levy should have been in effect.… Continue Reading

The CFPB recently ordered a bank to cancel garnishment fees, review its system for processing garnishment orders, cease using contracts which limit consumer rights, and pay a $10 million penalty to the CFPB’s Civil Penalty Fund.  

The garnishment process is a method for creditors to recover amounts that a judgment debtor owes from a third party that holds the judgment debtor’s assets, such as a deposit account held by a bank. … Continue Reading