Archive

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 […]

SUGGESTIONS FOR HANDLING OVERDRAFTS

On December 8, 2021, Acting Comptroller of the Currency Michael J. Hsu shared his thoughts regarding overdraft practices at the Consumer Federation of America’s 34th Annual Financial Services Conference. Mr. Hsu stated, “As we all know, it is expensive to be poor. And a significant part of that expense comes from the products and services offered by banks themselves. As the Brookings Institution has noted recently, ‘The existing system is regressive (reverse Robin Hood), creating […]

COMPLIANCE RISK – READING BUT NOT ACTING

In late 2017 the FDIC’s Dallas Region Quarterly Newsletter contained an article entitled Automated Overdraft Program and One-Time Debit and ATM Opt-In Procedure Considerations. The article described a situation observed in several examinations regarding overdraft programs and the interplay with Regulation E opt-in requirements. The well-written article concluded with the following admonition, “If you self-identify violations or potential issues described in this article, management should immediately modify procedures to prevent consumer harm, identify any customers […]

CFPB’s ANNOUNCEMENT ON OVERDRAFT PROTOTYPES AND THEIR AFFECT ON YOUR BANK

Very early Friday morning the CFPB sent another shot across the bow regarding overdraft accounts that likely are a forerunner to upcoming rules on automated overdrafts which will cover check and ACH transactions.   The CFPB has been in testing mode for a few years now and as part of that testing has been obtaining customer feedback as to the clarity of a variety of overdraft disclosures. Director Cordray stated the bureau is not proposing any […]

PREPAID ACCOUNTS JUST GOT KICKED UP TO THE CONSUMER PROTECTION SUITE

On October 3, 2016 the CFPB issued its final rule for general purpose prepaid accounts which will generally go into effect on October 1, 2017.   This culminated a 4+ year wait since the CFPB announced its initial intention to regulate prepaid accounts and 2 years from its proposal.  The CFPB’s initial 870 page ANPR has morphed into a 1,689-page final rule so it’s easy to determine that numerous products and requirements were added on that […]