Overdrafts

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This past January, the CFPB filed a lawsuit against TCF National Bank in Minnesota federal district court that alleged that the bank, in connection with offering overdraft services, violated the Consumer Financial Protection Act’s UDAAP prohibition and Regulation E (which implements the Electronic Funds Transfer Act).  Earlier this month, the district court granted in part TCF’s motion to dismiss the CFPB’s amended complaint and dismissed with prejudice the CFPB’s Regulation E claims.  This opinion represents a serious setback for the CFPB (1) specifically in connection with other similar overdraft protection cases in which the CFPB has alleged that a bank’s opt-in procedure violated Regulation E, and (2) generally in connection with a wide variety of cases in which the CFPB is seeking to recover damages and civil money penalties for alleged CFPA violations that predate July 21, 2011.

Although it was undisputed that TCF had provided the opt-in notice required by Regulation E, the CFPB alleged that TCF engaged in abusive and deceptive practices in connection with enrolling new customers in overdraft services and that it did not comply with the Regulation E requirements to provide a “reasonable opportunity” for customers to consent to overdraft services and to obtain the customer’s affirmative consent.

The court was unwilling to dismiss the CFPB’s UDAAP claims because it could not conclude that “the Bureau failed to plausibly allege abusive or deceptive conduct simply because the required notice was provided at some point during the account-opening process.”  However, the court would not allow the CFPB to assert UDAAP claims arising before July 21, 2011 (the CFPA’s “designated transfer date”) using “a type of continuing-violation theory.”  The court observed that “accepting the Bureau’s argument theoretically could render unlawful every account opening ever conducted by TCF, since some of them occurred after the CFPA’s effective date.”

In dismissing the CFPB’s Regulation E claims, the court rejected the CFPB’s attempt to transform conduct that allegedly violated the CFPA into Regulation E violations.  According to the court, while the CFPA broadly attaches to abusive or deceptive practices, “Regulation E, on the other hand, specifies with almost surgical precision the information banks must convey to consumers in connection with overdraft services—a description of the services, the right to opt-in (or not) and so on—and the ways in which they may obtain consumers’ consent.”

The court determined that Regulation E’s “reasonable opportunity” requirement “concerns only the manner in which consent may be obtained, and nothing more.”  In the court’s view, Regulation E’s intent was “to delineate specific information banks must provide to customers, not to more broadly prevent misleading or deceptive conduct in connection with the opt-in decision—the purview of the CFPA.”  Because the amended complaint did not allege that TCF failed to provide reasonable or appropriate means for consumers to provide consent, the court concluded that the CFPB’s “reasonable opportunity” claim failed.

The court also characterized the CFPB’ claim that customers failed to “affirmatively consent” because they did not understand what they were agreeing to as an attempt to “squeeze the CFPA’s broader proscriptions against misleading conduct into [Regulation E].”  The court noted that the amended complaint contained no plausible allegation that TCF failed to “actually obtain” new or existing customers’ consent to overdraft services. (emphasis provided). Calling this deficiency “fatal,” the court observed that Regulation E “requires a bank to obtain ‘affirmative consent’ and nothing more, and it is not infused with the CFPA’s gloss of preventing ‘abusive’ or ‘deceptive’ conduct.  By the Bureau’s reckoning, it would not be enough to obtain a consumer express (or ‘affirmative’) consent, but rather a bank such as TCF would be required to obtain the customer’s informed consent, lest it violate Regulation E.” (emphasis provided).

Last month, the CFPB issued another report on checking account overdraft services and four one-page prototype model forms to replace the current Regulation E model form for banks to use to disclose overdraft fees and obtain a consumer’s consent to overdraft services.  In its Spring 2017 rulemaking agenda, as it did in its Fall 2015 agenda and Fall and Spring 2016 agendas, the CFPB stated that it “is continuing to engage in additional research and has begun consumer testing initiatives related to the opt-in process.”

Earlier this month, the CFPB issued another report on checking account overdraft services, “Data Point: Frequent Overdrafts,” and four one-page prototype model forms to replace the current Regulation E model form for banks to use to disclose overdraft fees and obtain a consumer’s consent to the bank’s overdraft service for ATM and one-time debit card transactions.

In response to the report and prototype forms, the American Bankers Association has sent a letter to the CFPB to offer comments on the report and prototype forms and make suggestions for additional data development and analysis that include the following:

  • Because the Data Point report looked at transactions occurring between January 2011 and June 2012, it does not account for the existence of more consumer opportunities to use alternative products, avoid overdrafts, or have an overdraft product with features selected by the consumer.  It also does not consider changes in bank practices such as redesigned overdraft programs, fee waivers for de minimis overdrafts, and daily fee caps. The ABA also notes that many banks have adopted policies to post transactions in low-to-high order or have otherwise changed their posting order.
  • A major analytical shortcoming of the report is that it only reflects data from no more than eight large banks covered by the CFPB’s supervisory authority (i.e., banks with more than $10 billion in total assets) and such banks’ practices may not be representative of the entire banking industry.
  • There has been inadequate study of frequent users of overdraft products and their reasons for using the products and understanding of the products.
  • The CFPB has left unanswered the question of where regular users of overdraft products will turn for emergency funds if they no longer have access to such products.
  • Unless the CFPB amends Regulation E and adopts one of the prototype forms as a new model disclosure, a bank could not use one of the prototype forms without foregoing the limited Regulation E safe harbor for use of a disclosure other than the model form. The CFPB’s solicitation of emailed comments on the prototypes is insufficient under the Paperwork Reduction Act and the CFPB must follow the PRA’s standard clearance process to test the effectiveness of a new opt-in disclosure.
  • The prototype forms do not clearly state that, if a customer has opted in to overdraft protection, the bank will pay an overdraft at its discretion. They also do not make clear that if a consumer has not opted in to overdraft protection for ATM and debit card transactions, those transactions will, in nearly all instances, be declined if the consumer has insufficient funds to cover them.

The CFPB has issued another report on checking account overdraft services, “Data Point: Frequent Overdrafts.”  The new report represents the CFPB’s third report dealing with overdraft services.  It previously issued a white paper in June 2013 and another “Data Point” report in July 2014.

In addition to the new report, the CFPB released four one-page prototype model forms to replace the current Regulation E model form for banks to use to disclose overdraft fees and obtain a consumer’s consent to the bank’s overdraft service for ATM and one-time debit card transactions.  The CFPB stated in its press release that it developed the prototypes through interviews with consumers and is now testing them more widely.

The 2014 report used data taken from account-level and transaction-level data for about two million accounts at large banks covered by the CFPB’s supervisory authority (i.e., banks with more than $10 billion in total assets). The new report states that the CFPB relied on a portion of the data set used in the 2014 report and supplemented that data with “additional data for a randomly selected subset of the active accounts in our sample from a nationwide credit repository.”

According to the report, the data set used for the new report contains information on about 240,000 active accounts, including about 48,000 accounts belonging to “frequent overdrafters.”  The CFPB defines “frequent overdrafters” as “accounts with more than 10 overdrafts and NSFs combined in a 12-month period.”  (“Very frequent” overdrafters are defined as “accounts with more than 20 overdrafts and NSFs combined in a 12-month period,” “non-overdrafters” are defined as “those with no overdrafts or NSFs in a 12-month period, and “infrequent” overdrafters are defined as “those with three or fewer overdrafts and NSFs combined in a 12-month period.”)

The new report’s key findings include:

  • Frequent overdrafters account for nine percent of all accounts but paid 79 percent of all overdraft and NSF fees.  Very frequent overdrafters account for about five percent of all accounts but paid over 63 percent of all overdraft and NSF fees.
  • Frequent overdrafters generally have lower credit scores and are less likely to have a general purpose credit card than non-overdrafters or infrequent overdrafters.  Those that have a general purpose credit card have less available credit on such cards than non- or infrequent overdrafters.
  • The dollar amount of monthly deposits into a checking account and the variability in monthly deposits, even after excluding low-activity accounts, is not strongly correlated with the number of overdrafts or NSFs incurred.  Once low-activity accounts are excluded, the CFPB found that overdrafters have lower median deposits than non-overdrafters.
  • The account usage characteristics and circumstances of frequent overdrafters vary considerably.  Four groups constituting nearly 70 percent of frequent overdrafters have low end-of-day balances (with medians between $237 and $439), low or moderate credit scores (with medians between 532 and 661), and low or moderate monthly deposits (with medians between $1,516, and $2,724).  Another group constituting 20 percent of frequent overdrafters has low end-of-day balances (median of $140), low monthly deposits (median of $1,313) and no credit score.  The remaining group, constituting about 11 percent of frequent overdrafters, has higher end-of-day balances (median of $1,403), significantly higher monthly deposits (median of $7,828), but only moderate credit scores (median of 635).
  • Compared to the median frequent overdrafter that has opted-in to overdraft services on one-time debit card transactions, the median frequent overdrafter that has not opted-in experiences only four fewer overdrafts per year but, accounting for fee reversals, pays 13 fewer overdraft fees per year.  Thus, opted-in consumers pay significantly more overdraft fees but incur only slightly more overdrafts than consumers who are not opted-in.  The CFPB suggests that this is likely the result of “authorize positive/settle negative” transactions (i.e. transactions that result from a bank’s payment or authorization of another debit between the authorization and settlement of the one-time debit transaction where the intervening debit creates a negative balance).

The CFPB offers no conclusions based on its findings and while the CFPB does not discuss its rulemaking plans, rulemaking does not appear to be imminent.  In its Spring 2017 rulemaking agenda, as it did in its Fall 2015 agenda and Fall and Spring 2016 agendas, the CFPB stated that it “is continuing to engage in additional research and has begun consumer testing initiatives related to the opt-in process.”  We have previously suggested that the CFPB may feel it is less urgent for it to promulgate a rule prohibiting the use of a high-to-low dollar amount order to process electronic debits because most of the banks subject to its supervisory jurisdiction have already changed their processing order

The CFPB’s Fall 2016 rulemaking agenda has been published as part of the Fall 2016 Unified Agenda of Federal Regulatory and Deregulatory Actions.  The preamble indicates that the information in the agenda is current as of October 19, 2016.  Accordingly, given the results of the Presidential election, including its potential impact on the CFPB’s leadership, there is likely to be a post-election reevaluation by the CFPB of its agenda.  The agenda sets the following timetables for key rulemaking initiatives:

Arbitration.  The CFPB released its proposed arbitration rule in May 2016 and the comment period ended on August 22, 2016.  The Fall 2016 agenda indicates that the CFPB “is reviewing and considering comments on the proposed rule” as it “considers development of a final rule for early 2017.”  The agenda gives a February 2017 estimated date for a final rule.  In recent days, we have heard speculation that the CFPB will issue a final rule before Donald Trump’s inauguration as President on January 20.  As we discussed in a recent blog post, a final arbitration rule or other new final rules issued by the CFPB (and potentially any final rules issued since late May 2016) could be nullified by Congress under the Congressional Review Act (CRA).  The CRA establishes a special set of procedures that allow Congress to pass a joint resolution disapproving a rule which cannot be filibustered in the Senate and can be passed by only a simple majority vote.

Payday, title, and deposit advance loans.  The CFPB released its proposed rule on payday, title, and high-cost installment loans in June 2016 and the comment period ended on October 22, 2016.  While there has also been speculation that the CFPB will attempt to finalize a rule by January 20, that possibility seems more remote given the unprecedented level of comments (approximately one million) received by the CFPB and the complexity of the proposed rule.  The Fall 2016 agenda does not give an estimated date for a final rule.

Debt collection.  In November 2013, the CFPB issued an Advance Notice of Proposed Rulemaking concerning debt collection.  In July 2016, it issued an outline of the proposals it is considering in anticipation of convening a SBREFA panel.  It has been reported that the SBREFA panel for the CFPB’s debt collection rulemaking met with small entity representatives (SER) at the end of August 2016.  Within 60 days from the date it is considered to have “convened,” the panel must submit a report to the CFPB on the input received from the SERs.  However, the report will not become public until the CFPB issues its proposed rule.

The CFPB’s proposals only cover “debt collectors” that are subject to the FDCPA.  They are not intended to apply to a first-party creditor collecting its own debts or to a servicer when collecting debts that were current when servicing began to the extent the creditor or servicer would not be a “debt collector” under the FDCPA.  When it issued the proposals, the CFPB stated that it “expects to convene a second proceeding in the next several months” for creditors and others engaged in debt collection not covered by the proposals, noting that it believes a separate SBREFA process “is the most efficient way to proceed, particularly because it will allow participants to provide more focused and specific insights.”

In the Fall 2016 agenda, the CFPB states that it “expects to convene a separate SBREFA proceeding focusing on companies that collect their own debts in 2017.”  The agenda gives a February 2017 estimated date for further prerule activities.

Overdrafts.  The CFPB issued a June 2013 white paper and a July 2014 report on checking account overdraft services.  In the Fall 2016 agenda, as it did in its Fall 2015 and Spring 2016 agendas, the CFPB states that it “is continuing to engage in additional research and has begun consumer testing initiatives related to the opt-in process.”  Although the Spring 2016 agenda estimated an August 2016 date for further prerule activities, the new agenda moves that date to January 2017.  As we have previously noted, the extended timeline may reflect that the CFPB feels less urgency to promulgate a rule prohibiting the use of a high-to-low dollar amount order to process electronic debits because most of the banks subject to its supervisory jurisdiction have already changed their processing order.

Larger participants.  As it did in its Fall 2015 and Spring 2015 agendas, the CFPB states in the Fall 2016 agenda that it is considering “larger participant” rules “in markets for consumer installment loans and vehicle title loans for purposes of supervision.”  It also repeats its previous statement that the CFPB is “also considering whether rules to require registration of these or other non-depository lenders would facilitate supervision, as has been suggested to the Bureau by both consumer advocates and industry groups.”  (Pursuant to Dodd-Frank Section 1022, the CFPB is authorized to “prescribe rules regarding registration requirements applicable to a covered person, other than an insured depository institution, insured credit union, or related person.”)  While the Spring 2016 agenda estimated a December 2016 date for prerule activities, the new agenda estimates a May 2017 date.

Small business lending data.  Dodd-Frank Section 1071 amended the ECOA to require financial institutions to collect and maintain certain data in connection with credit applications made by women- or minority-owned businesses and small businesses.  Such data include the race, sex, and ethnicity of the principal owners of the business.  While the Spring 2016 agenda estimated a December 2016 date for prerule activities, the new agenda estimates a March 2017 date.  The CFPB states in the Fall 2016 agenda that it “is focusing on outreach and research to develop its understanding of the players, products, and practices in business lending markets and of the potential ways to implement section 1071.  The CFPB then expects to begin developing proposed regulations concerning the data to be collected and determining the appropriate procedures and privacy protections needed for information-gathering and public disclosure under this section.”

Mortgage rules.  In July 2016, the CFPB issued a proposed rule containing both substantive amendments and technical corrections to the final TILA-RESPA Integrated Disclosure rule.  The comment period on the proposal ended on October 18, 2016 and the Fall 2016 agenda gives a March 2017 estimated date for issuance of a final rule.  The Fall 2016 agenda gives a March 2017 estimated date for a proposed rule “to amend certain provisions of Regulation C to make technical corrections and to clarify certain requirements under Regulation C” and a proposed rule “to amend Regulation B to reconcile how creditors may collect information about the ethnicity and race of applicants to clarify how financial institutions and creditors subject to Regulation C and Regulation B may comply with both regulations.”

Student Loan Servicing and Consumer Reporting.  As they were in the Fall 2015 and Spring 2016 agendas, both of these topics continue to be listed in the Fall 2016 agenda as “long-term action” items with no estimated dates for further action.  The Office of Management and Budget defines “long-term action” items as “items under development but for which an agency does not expect to have a regulatory action within 12 months after publication of this edition of the Unified Agenda.”

On November 9, 2016, the Federal Reserve hosted a webinar on overdraft practices.  The CFPB was represented by Victoria Pawelski, Counsel, Supervision Policy, Supervision, Enforcement and Fair Lending.  In addition to a CFPB representative, the presenters included representatives from the Fed, FDIC, OCC and NCUA.

The presenters each discussed issues identified by their respective agency through consumer complaints, examinations, or enforcement actions.  A copy of the slides used by the presenters can be found here.

The presentation was followed by a Q&A segment.  In response to a question about the CFPB’s overdraft rulemaking plans, Ms. Pawelski stated that the CFPB is continuing to consider whether to propose an overdraft rule.  She also noted the CFPB’s June 2013 white paper and July 2014 report on checking account overdraft services.

 

 

The Federal Reserve has announced that on November 9, 2016, it will host a webinar on overdraft practices.  Webinar speakers will discuss issues identified through consumer complaints, examinations, and enforcement actions.

In addition to a CFPB representative, the speakers will include representatives from the Fed, FDIC, OCC and NCUA.  The presentation will be followed by a Q&A segment.  Information about registration is available here.

The CFPB is currently considering whether to propose an overdraft rule.  It has issued a June 2013 white paper and a July 2014 report on checking account overdraft services.

 

The American Bankers Association has sent a comment letter to the CFPB challenging the Bureau’s use of the generic clearance process to conduct research in connection with its overdraft rulemaking.  The letter was submitted in response to the CFPB’s request for approval from the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) of an existing generic clearance “to collect quantitative data on effective strategies and consumer experiences….” (Qualitative Consumer Education Generic Clearance).

The CFPB had indicated that the purpose of the Qualitative Consumer Education Generic Clearance was “to develop a deeper understanding of effective financial education and empowerment strategies.”  The ABA asserts that the CFPB “has used this clearance to conduct information collections on substantive and policy-related issues-namely, overdraft services-which is prohibited by the guidance interpreting the PRA that was published by the Office of Information and Regulatory Affairs (OIRA) of the [OMB].”  According to the ABA, this guidance makes such collections subject to the standard PRA clearance process, which requires notice to the public and an opportunity for comment.

The ABA contends that after obtaining approval for the Qualitative Consumer Education Generic Clearance in 2013, the CFPB improperly used the clearance to seek approval, without prior public notice, for an information collection on “Qualitative Research of Consumer Understanding and Decision-making Related to Overdrafts.”  The ABA states that because the collection will clearly inform the CFPB’s overdraft rulemaking, it should have been pursued through a standard clearance. The ABA observes that the topics involved in the collection, such as the frequency of the respondents’ usage of overdraft services, “bear directly on policy questions the Bureau is almost certainly considering as part of its rulemaking on overdraft, including the need for increased disclosures and limitations on usage.”

The ABA urges the CFPB to refrain from improperly using a generic clearance to conduct an individual collection on substantive or policy issues and to seek approval for a standard clearance when it desires to conduct such a collection.  The ABA has also challenged the CFPB’s use of the generic clearance process for previous collections.

 

The CFPB has released its Spring 2016 rulemaking agenda.  The agenda sets the following timetables for key rulemaking initiatives: 

Arbitration.  The Spring 2016 agenda does not reflect the CFPB’s release of its proposed arbitration rule on May 5, 2016, stating only that the CFPB “is preparing to issue a Notice of Proposed Rulemaking this spring.”  The CFPB’s proposed rule would prohibit covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action with respect to the covered consumer financial product or service.  The proposed rule would also require a covered provider that is involved in an individual arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the CFPB.  We do not expect to see a final rule until next year.

Payday and deposit advance loans.  The Spring 2016 agenda also does not reflect the CFPB’s announcement that it will hold a field hearing on small dollar lending in Kansas City, Missouri on June 2, 2016.  We anticipate the field hearing will coincide with the CFPB’s release of its proposed rule which is expected to cover single-payment payday and auto title loans, deposit advance products, and certain high-rate installment and open-end loans.  The Spring 2016 agenda indicates only that the CFPB is “conducting a rulemaking to address consumer harms from practices related to payday loans and other similar credit products” and gives a June 2016 estimated date for issuance of a Notice of Proposed Rulemaking (NPRM).

Prepaid financial products.  In November 2014, the CFPB issued a proposed rule for prepaid financial products, including general-purpose reloadable prepaid cards and certain digital and mobile wallets.  The Spring 2016 agenda estimates the issuance of a final rule in July 2016.  The Fall 2015 agenda had estimated that a final rule would be issued in March 2016.

Overdrafts.  The CFPB issued a June 2013 white paper and a July 2014 report on checking account overdraft services.  In the Spring 2016 agenda, as it did in the Fall 2015 agenda, the CFPB states that it “is continuing to engage in additional research and has begun consumer testing initiatives related to the opt-in process.”  Although the Fall 2015 agenda had estimated a January 2016 date for further prerule activities, the new agenda moves that date to August 2016.  In light of the fact that most of the banks subject to CFPB supervisory jurisdiction have changed the order in which they process electronic debits, we believe the CFPB feels less urgency to promulgate a rule prohibiting the use of a high-to-low dollar amount order to process such debits.

Debt collection.  In November 2013, the CFPB issued an Advance Notice of Proposed Rulemaking concerning debt collection.  In the Spring 2016 agenda, as it did in the Fall 2015 agenda, the CFPB states that “it is in the process of analyzing responses to a survey seeking information from consumers about their experiences with debt collectors and is engaged in qualitative testing to determine what information would be useful for consumers to have about debt collection and how that information should be provided to them.”  The agenda estimates that further prerule activities, which are expected to involve the convening of a SBREFA panel, will occur in June 2016.  The CFPB had estimated in its Fall 2015 agenda that further prerule activities would occur in February  2016.

Larger participants.  As it did in its Fall  2015 agenda, the CFPB states in the Spring 2016 agenda that it is considering  “larger participant” rules for “consumer installment loans and vehicle title loans.”  It also repeats the statement in the Fall 2015 agenda that the CFPB is “also considering whether rules to require registration of these or other non-depository lenders would facilitate supervision, as has been suggested to the Bureau by both consumer advocates and industry groups.”  (Pursuant to Dodd-Frank Section 1022, the CFPB is authorized to “prescribe rules regarding registration requirements applicable to a covered person, other than an insured depository institution, insured credit union, or related person.”)  While the prior agenda estimated a September 2016 date for prerule activities, the new agenda estimates a December 2016 date.

Small business lending data.  Dodd-Frank Section 1071 amended the ECOA to require financial institutions to collect and maintain certain data in connection with credit applications made by women- or minority-owned businesses and small businesses.  Such data include the race, sex, and ethnicity of the principal owners of the business.  The Spring 2016 agenda estimates a December 2016 date for prerule activities.  We recently reported that the CFPB had filled the position of Assistant Director for the Office of Small Business Lending Markets.  The CFPB’s job posting indicated that the Assistant Director would head the CFPB’s team involved in developing rules to implement Section 1071.  In the Spring 2016 agenda, the CFPB states that it “will focus on outreach and research to develop its understanding of the players, products, and practices in the small business lending market and of the potential ways to implement section 1071.  The CFPB then expects to begin developing proposed regulations concerning the data to be collected and appropriate procedures, information safeguards, and privacy protections for information-gathering under this section.”

Mortgage rules.  In November 2014, the CFPB issued a proposal to amend various provisions of its mortgage servicing rules.  The Spring 2016 agenda estimates issuance of a final rule in July 2016.  The previous agenda had estimated a June 2016 date.  The new agenda also estimates a September 2016 date for issuance of a proposed interagency rule to implement Dodd-Frank amendments to FIRREA concerning appraisals.  The previous agenda had estimated an April 2016 date.  In April 2016, the CFPB announced its intention to reopen the rulemaking for the TILA/RESPA Integrated Disclosure rule.  At that time, the CFPB indicated that a NPRM would likely be issued in late July and, consistent with that timetable, the Spring 2016 agenda estimates a July 2016 date for a NPRM.

Student Loan Servicing and Consumer Reporting.  As they were in the Fall 2015 agenda, both of these topics continue to be listed as “long-term action” items in the Spring 2016 agenda.

 

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.