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The OCC has issued a new bulletin and the FDIC has issued new supervisory guidance directed to their supervised institutions to address “authorize positive, settle negative” (APSN) overdraft  fee practices.  The OCC bulletin also addresses non-sufficient funds (NSF) fee practices.  Based on the bulletin and guidance, it would appear that the OCC and FDIC share the CFPB’s apparent view that APSN fees are unfair regardless of how clearly and conspicuously they are disclosed to consumers. … Continue Reading

In a new report published last week titled “Banks’ overdraft/NSF fee revenue declines significantly compared to pre-pandemic levels,” the CFPB reported that its most recent analysis found that bank overdraft/NSF fee revenue was 43% lower in the third quarter of 2022 than in the third quarter of 2019 before the COVID-19 pandemic onset – suggesting $5.1 billion less in fees on an annualized basis. … 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

A group of 12 Republican Senators have sent a letter to CFPB Director Rohit Chopra in which they urge him “to reverse course and stop using inappropriate tactics to harm financial institutions’ reputations and customer relationships in order to advance your liberal policy preferences.”

In their letter, the Senators assert that “rather than operating as a tough, but fair and sensible regulator, the CFPB is again pursing a radical and highly-politicized agenda unbounded by statutory limits.” … Continue Reading

A Delaware federal court has refused to dismiss a class action complaint filed against a credit union that alleges the credit union violated Regulation E and the Delaware Consumer Fraud Act (CFA) even though the credit union’s overdraft opt-in notice tracked the language in the Regulation E model notice.  The decision should serve as a reminder to financial institutions of the need to make sure their opt-in notices accurately and fully describe their overdraft policies. … Continue Reading

Overdraft and NSF fees remain very much on the radar of the CFPB, the federal banking agencies, and certain state banking agencies.  The very fact that the CFPB continues to closely monitor bank call reports with respect to overdraft and NSF fee revenues demonstrates the Bureau’s ongoing focus on this issue. … Continue Reading

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 responded to questions from the Subcommittee members. … Continue Reading

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 similar rulings by the First and Fifth Circuits.… Continue Reading

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 based on publicly available information, including press releases, publicly available account disclosures, and news reports.… Continue Reading

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.… Continue Reading