CFPB notes continued look at overdraft

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CFPB released its report yesterday on banks' overdraft services.

Aug. 1, 2014 – CFPB said Thursday that it will conduct more studies on how overdraft services are working for consumers and that it continues to look into the possibility of a future rulemaking.

The bureau released a report Thursday that looked at the overdraft services provided by large banks within its supervisory authority – that is banks with more than $10 billion in assets. It found that most debit-card overdraft fees are incurred on transactions involving $24 or less and that the majority of them are repaid within three days.

CFPB noted exorbitant nature of a $34 fee charged on a $24 overdraft that is repaid in three days. However, it also notes that it didn’t think the sampling for the study was fully representative of the checking account market overall.

Bankrate.com’s 2014 study on checking shows that the most common overdraft fee charged by credit unions is $25. The report also shows that 72 percent of the 50 largest credit unions charged no monthly service fees or point-of-sale transaction fees, regardless of account balance. By 38 percent of banks offered the accounts for free last year.

In reporting its survey, Bankrate quoted Carrie Hunt, NAFCU’s senior vice president of government affairs and general counsel, noting the value credit unions and their members place on ensuring free checking.

NAFCU is closely following CFPB’s work on the overdraft issue for any potential impact on credit unions’ ability to provide members continued, affordable services.

 

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