CFPB Turns its Attention to Checking Accounts

The Consumer Financial Protection Bureau (CFPB) is no longer confining its attention to loans, as yesterday marked the launch of the CFPB’s inquiry into checking accounts and overdraft protection services. The move is part of a continuing commitment by the CFPB to examine—and potentially change—all aspects of consumer protection and transparency in financial transactions. While none of its actions on deposit accounts are final (or even officially proposed) yet, the direction the CFPB is travelling is clear.

Richard Cordray, the director of the CFPB, announced the new initiative in a live webcast Wednesday morning. In his presentation, Cordray noted that the bureau has launched an inquiry into overdraft protection practices, which includes a public notice and request for information. The CFPB is now seeking information about alternatives to overdraft protection and consumer use of said alternatives. It is also interested in transaction processing order, how the “opt in” changes impacted consumers, methods consumers can use to be alerted of low balances on their accounts, and the economics of overdraft programs.

Cordray also highlighted the CFPB’s new model overdraft “penalty fee box,” which attempts to make the costs of overdraft protection and methods to avoid paying overdraft protection fees clearer to consumers. The CFPB is currently seeking feedback on this new model disclosure.

The CFPB held a town hall meeting in New York Wednesday afternoon to gather consumer experiences with checking accounts. The purpose was to gather information about what sorts of things the CFPB can do to help consumers understand and use their checking accounts more effectively.

Archives of Cordray’s announcement and the New York town hall meeting are available on the CFPB’s website.

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

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