CFPB, Federal Agencies, State Agencies, and Attorneys General
Last week, the Senate Banking Committee’s Subcommittee on Financial Institutions and Consumer Protection held a hearing entitled “Examining Overdraft Fees and Their Effects on Working Families.” A recording of the hearing is available here.
After opening statements from Subcommittee Chairman Raphael Warnock (D-GA) and Ranking Member Thom Tillis (R-NC), three witnesses offered testimony and…
A divided panel of the U.S. Court of Appeals for the Tenth Circuit has ruled in Walker v. BOKF, National Association that the extended overdraft fees charged by BOKF were not “interest” under the National Bank Act (NBA). The Tenth Circuit’s ruling on what it called “an issue of first impression in this circuit” follows…
Tomorrow, March 30, the House Financial Services Committee will hold a hearing, “The End of Overdraft Fees? Examining the Movement to Eliminate the Fees Costing Consumers Billions.”
The Committee memorandum references two pending bills dealing with overdrafts. One bill is H.R. 4277, the “Overdraft Protection Act of 2021,” which would limit the number…
The CFPB has published a table that shows the overdraft/NSF practices of the 20 banks with the most overdraft/NSF revenue through the first three quarters of 2021. According to the CFPB, the table reflects over 80% of the total overdraft/NSF fees earned by banks with assets over $1 billion. The information in the table is…
In the last two weeks, both the CFPB and OCC have been critical of bank overdraft practices and the CFPB has warned of enhanced supervisory and enforcement scrutiny. The potential costly impact that such increased scrutiny could have on private litigation is demonstrated by the recent proposed settlement in Lowe v. NBT Bank, N.A.,…
In remarks last week to the Consumer Federation of America’s 34th Annual Financial Services Conference, Acting Comptroller of the Currency Michael Hsu took banks to task for contributing to income and wealth inequality through overdraft programs by earning $15.5 billion in overdraft fees in 2019 that “are being paid by those customers who are the…
CFPB Director Chopra used the release of two new reports about bank overdraft practices to warn banks—and responsible executives—that they could be at risk if the banks engage in overdraft practices deemed to violate Dodd-Frank’s “UDAAP” prohibition. Prior to the issuance of the two new reports, the Bureau’s most recent report on overdrafts was issued…
The Division of Banks of the Massachusetts Office of Consumer Affairs and Business Regulation has issued a supervisory alert to warn financial institutions of the potential legal and regulatory risks arising from NSF fees charged on the representment of unpaid transactions.
The alert addresses the common scenario in which a financial institution charges an NSF…
Despite having been a target for over a decade, bank overdraft practices still remain a focus of regulators and plaintiffs’ class action attorneys. We discuss federal and state legislative, regulatory, and enforcement developments; theories currently used by plaintiffs’ attorneys to challenge overdraft practices, including retry payment claims; litigation involving alleged Regulation E violations; and the…
At the end of last month, former New York Governor Cuomo signed into law a bill that amends the state’s Banking Law to require banks to follow certain check processing practices. The amendments become effective on January 1, 2022.
The new law applies to “consumer checking accounts” offered by “banking institutions.” “Consumer checking accounts” are…
