On October 25, the U.S. Court of Appeals for the Seventh Circuit affirmed a district court’s order dismissing a class action alleging that an Illinois internet-based credit union breached its account agreement when it charged non-sufficient funds (NSF) fees to its customers. Plaintiff alleged the account agreement required the credit union to use the ledger-balance to assess NSF fees and only assess one NSF fee per transaction.… Continue Reading
overdrafts
House Financial Services Committee passes the Overdraft Protection Act
By Michael Fausey on
Posted in Overdrafts, Regulatory and Enforcement
On July 28, the U.S. House Committee on Financial Services passed H.R. 4277, the Overdraft Protection Act. Introduced by Congresswoman Carolyn B. Maloney (D-NY), the bill would prohibit financial institutions from engaging in unfair or deceptive acts or practices in connection with overdraft coverage.
Specifically, the bill would require financial institutions that offer overdraft coverage for accounts to disclose: (i) the specific amount of overdraft coverage fees; (ii) that the consumer’s transaction may be declined if there are insufficient funds in the account; and (iii) that the consumer will not be charged a fee if the transaction is declined. … Continue Reading
NY Dept. of Financial Services issues overdraft/NSF fee guidance
The New York State Department of Financial Services (DFS) has issued an Industry Letter providing guidance on overdraft and non-sufficient funds (NSF) fees to depository institutions that it supervises.
The DFS indicates that, through the supervisory process, it has identified several unfair or deceptive acts or practices regarding the imposition of overdraft and NSF fees. … Continue Reading
CFPB continues focus on overdraft practices
By Brian Turetsky & John L. Culhane, Jr. on
Posted in CFPB, Overdrafts
In a blog post published last week, the CFPB reported that since the beginning of 2022, it has been collecting data from supervised institutions on their overdraft and non-sufficient fund (NSF) practices and intends to use the information to identify institutions for further examination and review. The CFPB also plans to provide feedback to each institution and share the information with other regulators but will not make the information publicly available.… Continue Reading
FDIC Consumer Compliance Supervisory Highlights looks at unauthorized EFTs, overdraft programs, re-presentment of unpaid transactions, and fair lending
By John L. Culhane, Jr. on
Posted in FDIC Supervision
The FDIC has issued the March 2022 edition of Consumer Compliance Supervisory Highlights which includes a description of some of the most significant consumer compliance issues identified by FDIC examiners during consumer compliance examinations conducted in 2021.
The issues described in the report consist of the following:
- Regulation E liability protections.
House to hold March 30 hearing on overdrafts
By Alan S. Kaplinsky on
Posted in Overdrafts
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 of overdraft fees a bank can charge on a monthly and annual basis and prevent financial institutions from re-ordering transactions to increase overdraft fees. … Continue Reading
Acting Comptroller of the Currency Hsu testifies about OCC activity on overdrafts, CRA, bank partnerships, alternative data
By Ronald K. Vaske on
This past Tuesday, Acting Comptroller of the Currency Michael Hsu appeared as a witness at the Senate Banking Committee’s hearing, “Oversight of Regulators: Does our Financial System Work for Everyone?”
In his written and oral testimony, Mr. Hsu stressed as an overall theme the need for the OCC to prohibit “predatory and discriminatory practices while promoting financial inclusion.” … Continue Reading
CFPB participates in Fed webinar on overdraft practices
By Barbara S. Mishkin on
Posted in Overdrafts, Regulatory and Enforcement
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. … Continue Reading
CFPB to participate in Fed webinar on overdraft practices
By Barbara S. Mishkin on
Posted in Overdrafts, Regulatory and Enforcement
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. … Continue Reading
ABA comments on CFPB proposed overdraft survey
By Barbara S. Mishkin on
Posted in Overdrafts, Regulatory and Enforcement
The American Bankers Association has submitted a letter commenting on the CFPB’s request for approval from the Office of Management and Budget to conduct “a national web survey of 8,000 individuals as part of its study of ATM/debit card overdraft disclosure forms.”
In its request, the CFPB stated that the survey “will explore consumer comprehension and decision-making in response to revised overdraft disclosures” as well as “financial product usage, behavioral traits, and other consumer characteristics that may interact with a consumer’s experiences with overdraft programs and related disclosure forms.” … Continue Reading