Overdraft

CBA supports the principles of customer choice, transparency, and fairness in deposit account partnerships. Recently-enacted federal regulation has afforded consumers greater protection via detailed disclosures. Absent substantial evidence that this regulation is failing or falling short of its intended purpose, CBA believes further incremental changes to the rules governing overdraft protection will only add logistical complexity and increased consumer confusion without corresponding benefits. CBA believes coordination among the federal banking regulators will lead to more regulatory certainty for financial institutions and greater clarity for consumers.
  • March 16, 2017
    Banks and other financial firms in 2016 generated the highest level of fees in seven years related to overdrafts on checking accounts, marking a turnaround for a charge crisis-era regulation tried to rein in. So-called overdraft fees totaled $33.3 billion in 2016, up about 2.5% from 2015 and by 5.4% from 2011, according to Moebs Services Inc., an economic-research firm. Overdrafts occur when...
  • January 19, 2017
    On Thursday, January 19, 2017, the CFPB sued TCF National Bank for allegedly “tricking” consumers into costly overdraft services in violation of Dodd-Frank as well as the Electronic Fund Transfer Act. The Bureau specifically alleges TCF designed its overdraft application process to obscure fees and make overdraft seem mandatory for new customers to open an account. The agency also believes the...
  • January 11, 2017
    On Wednesday, January 11, 2017, seven Senate Banking Committee Democrats, led by Ranking Member Sherrod Brown (D-OH) and Sen. Senator Elizabeth Warren (D-MA), sent a letter to CEO of Wells Fargo, Timothy Sloan, expressing concern and asking for more information regarding the bank’s increase in overdraft fee income. “We read with great concern a Financial Times report indicating Wells Fargo’s...
  • January 2, 2017
    Hundreds of thousands of American bank accounts will have swung into the red over the festive period — boosting profits for the big banks, which can charge up to $35 for each and every overdraft facility. But, if the regulator has its way, this huge and rising source of income for the banks could be limited. Since it was first created by the Dodd-Frank Act of 2010, The Consumer Financial...
  • December 22, 2016
    Happy Holidays From CBA On behalf of all of us here at CBA, we would like to wish you and your family a very Merry Christmas and Happy Hanukkah. For the holidays, I am heading home to Jennings, Louisiana to visit my family, and I hope you are able to do the same. Be safe, and I look forward to catching up with everyone in 2017. A Sit-down With Our Chairman on What it Means to be a Banker Tackling...
  • December 20, 2016
    On Wednesday, December 20, 2016, the Pew Charitable Trust released its latest study of bank overdraft practices. The study claims most major U.S. banks continue to charge high fees when customers overdraft their accounts, and many still reorder transactions aimed at maximizing overdraft fees. A separate review of small banks ($1B and below) found similar issues, marking the first time Pew has...
  • December 20, 2016
    Of all the many fees that banks charge, the overdraft fee may be the most perverse. And the most infuriating. Overdraft services began decades ago as a courtesy by banks to their customers: If you didn’t have enough money in your account to cover a check, your bank stepped up, saving you the hassle and embarrassment of bouncing it. Now that debit cards and recurring payments are increasingly...
  • September 21, 2016
    The Consumer Financial Protection Bureau has been eyeing potential changes to overdraft protection programs since its early days, but isn't likely to announce oversight plans anytime soon. Despite years examining the issue, observers said that it's not clear the CFPB has reached a conclusion about how to best tackle changes to overdraft protection programs. Fees for non-sufficient funds and...
  • July 21, 2016
    Bankers are taking the unusual step of asking the government for additional regulations — ones that can be used to block the Consumer Financial Protection Bureau from seeking more data from financial institutions. The American Bankers Association and the Consumer Bankers Association are urging the Office of Information and Regulatory Affairs to impose requirements on the "generic clearance"...
  • July 14, 2016
    On Thursday, July 14, 2016, the CFPB announced a consent order with Santander regarding overdraft policies. The Bureau alleged Santander’s telemarketers engaged in deceptive practices by signing consumers up for overdraft services without their consent, implying the overdraft services were free, insinuating there would be fees if consumers did not opt in, falsely claiming the call was not a sales...

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