Recently, the Consumer Finance Protection Bureau (CFPB) has said that its plan to overhaul overdraft fee regulations has been set aside for now.
The CFPB has suggested that financial institutions look at the way they charge customers for overdraft protection, their overdraft protection policies as well as overdraft fee regulations.
Last year, the CFPB published a study on the state of overdraft practices among financial institutions. It also rolled out prototypes of new overdraft disclosures so that banks and other financial institutions could have a template of what new overdraft fee regulations might look like.
The study reported on the risks that face those who overdraw their accounts frequently. On average, the study notes, customers who opt-in to overdraft protection programs pay about $450 more in fees each year than those who have not opted into an overdraft protection program.
Under the previous CFPB Director, Richard Cordray, the agency considered making new rulings on overdraft fee regulations. According to the Credit Union Times, the CFPB was encouraged by credit union groups to look at the issues surrounding overdraft fee regulations closely because the financial institutions studied did not include credit unions.
Currently, the acting CFPB Director Mick Mulvaney says that any new rules on overdraft fee regulations will be put in an “inactive” state until the agency secures a permanent director.
CUNA, the Credit Union National Association, told the Credit Union Times, “Credit unions offer overdraft programs as a convenience and accommodation to their members. Further, we encourage the CFPB to continue to study overdraft, so it can gain a better understanding of the benefits consumers derive from this product, and the differences between the overdraft products offered by credit unions and other financial institutions.”
Overdraft Fee Regulations
Banks and credit unions are obligated to allow customers to opt-in to overdraft protection programs. These programs, if utilized by a customer, often come with fees attached. When a customer overdraws his or her account, or attempts to spend more money than is in the account, if he or she has opted in to the overdraft protection program, a fee is assessed when the bank covers the cost of the transaction.
Often these fees are upwards of $35 to $40 per overdrawn transaction. Typical families who must utilize overdraft protection programs make less than the national median income and fees like this, when they add up, can be hard to overcome. Many customers who use overdraft protection live “paycheck-to-paycheck.”
In 2015, the 628 largest financial institutions made $11 billion from overdraft according to the CFPB.
Some customers believe that banks and credit unions should be held to stricter overdraft fee regulations. The CFPB believes that banks should do a better job of disclosing to their customers the ins and outs of overdraft fees and what they could possibly owe.
Even though the CFPB’s previous suggestions have been put on the back burner until a new director is chosen, many still believe that overdraft fee regulations should include more disclosure to customers.
Do YOU have a legal claim? Fill out the form on this page now for a free, immediate, and confidential case evaluation. Some of the banks and credit unions being investigated include, but are not limited to:
- HSBC Bank
- UMB Bank
- State Employees Credit Union
- Pentagon Federal Credit Union
- Boeing Employees Credit Union
- Alliant Credit Union
- Star One Credit Union
- First Technology Federal Credit Union
- America First Credit Union
- American Airlines Federal Credit Union
- Alaska USA Federal Credit Union
- Vystar Credit Union
- Citizens Equity First Credit Union
- Teachers Federal Credit Union
- ESL Federal Credit Union
- Patelco Credit Union
- DFCU Financial Credit Union
The attorneys who work with Top Class Actions will contact you if you qualify to let you know if an individual lawsuit or class action lawsuit is best for you. Hurry — statutes of limitations may apply.
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If your bank and credit union has engaged in deceptive overdraft fee practices, you may have a legal claim. Fill out the form on this page now to find out if you qualify!
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In order to properly investigate overdraft fee claims, you may be required to disclose bank statements to overdraft fee attorneys. Please note that any such information will be kept private and confidential.
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