Archive

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 […]

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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 […]

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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 […]

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ILLEGAL OVERDRAFT PRACTICES

The Consumer Financial Protection Bureau (CFPB) has ordered Delaware-based Santander Bank, N.A. to pay a $10 million fine for illegal overdraft service practices. Santander’s telemarketing vendor deceptively marketed the overdraft service and signed certain bank customers up for the service without their consent. In addition to paying the civil money penalty to the CFPB, Santander must go back and give consumers the opportunity to provide their affirmative consent to overdraft service, not use a vendor […]

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