On January 17, 2024, the CFPB proposed a 211-page rule to limit overdraft fees charged by the nation’s biggest financial institutions. The proposal is intended to close what the CFPB calls a loophole that exempts overdraft lending services from longstanding provisions of the Truth in Lending Act and other consumer financial protection laws. The CFPB stated that very large financial institutions have been issuing highly profitable overdraft loans, resulting in billions of dollars in revenue […]
Category: Overdrafts
CFPB’s Releases a Special Supervisory Highlights Report All About Junk Fees
Fee practices continue to be in the spotlight and with the release of the special addition of the CFPB’s Supervisory Highlight, it looks like they are about to get even more attention and scrutiny. The Highlights come within a few months of major enforcement actions and other CFPB guidance. Since the fall of 2022, three financial institutions have had the unfortunate experience of being cited and accused of having potentially unfair, deceptive, or abusive policies […]
Regulatory Bulletin: FDIC Re-Presentment
On August 3, 2022, our very own Kimberly Boatwright brought to your attention the increasing risk of overdraft programs to financial institutions. Discussing the New York State Department of Financial Services (DFS) and their stance on overdraft fees. In that Blog she discussed the DFS position on: Overdraft Fees Relating to Authorize Positive, Settle Negative (“APSN”) Transactions Double Fees Arising from Futile Overdraft Protection Transfers Double Fees Arising from Futile Overdraft Protection Transfers It was […]
STATE OF NEW YORK ISSUES AN INDUSTRY LETTER TO ALL STATE CHARTERED BANKS! WILL THERE BE MORE?
On July 12, 2022, The New York State Department of Financial Services (DFS) issued an Industry Letter providing guidance on overdraft and non-sufficient funds (NSF) fees to depository institutions that it supervises. The DFS indicated that, through the supervisory process, it identified several unfair or deceptive acts or practices regarding the imposition of overdraft and NSF fees. The Industry Letter intended to alert New York institutions that the DFS “will evaluate whether Institutions are engaged in deceptive […]
CFPB ATTACKS BANK FEES
In a recent blog post and in recent training we pointed out the financial institution regulatory agencies attack on overdraft fees. Now the attack is being broadened. On January 26, 2022, the Consumer Financial Protection Bureau (CFPB) issued a request for public comment on the topic of Fees Imposed by Providers of Consumer Financial Products or Services. Comments will be accepted until March 31, 2022. The request is a chance for the public to share […]