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February 03, 2016
CFPB urges overdraft-free checking option, issues bulletin
CFPB early this morning announced it has urged the nation's 25 largest retail banks to offer lower-risk deposit accounts "that help consumers avoid overdrafting" and a bulletin reminding both banks and credit unions of the accurate-reporting requirements of the Fair Credit Reporting Act.
The announcement and bulletin – which also addresses "specialty" consumer reporting agencies, such as those focusing on checking account activity – was released as the CFPB prepares for an 11 a.m. Eastern field hearing today in Louisville, Ky., on checking accounts. In addition to checking and overdraft, the announcement also notes the release of resources to encourage consumers to shop for lower-risk checking and prepaid accounts that will not authorize them to exceed their account balances.
NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt said the association supports arming consumers with information that will help them make sound decisions about checking and other financial services. She reminded that credit unions already are offering the types of accounts and information CFPB is pushing in today's statements.
"Credit unions' very livelihood depends on their member-owners having the information and services that will help them meet their financial goals," Hunt said. "Credit unions remain the best choice for consumers seeking low- or no-fee checking, and the majority of those offering overdraft services also offer alternatives such as overdraft lines of credit and linked savings accounts."
Hunt said NAFCU is in ongoing contact with CFPB officials and staff on this issue as it seeks to ensurecredit unions' unfettered ability tomeetthefinancial services needs of their members.
The announcement and bulletin – which also addresses "specialty" consumer reporting agencies, such as those focusing on checking account activity – was released as the CFPB prepares for an 11 a.m. Eastern field hearing today in Louisville, Ky., on checking accounts. In addition to checking and overdraft, the announcement also notes the release of resources to encourage consumers to shop for lower-risk checking and prepaid accounts that will not authorize them to exceed their account balances.
NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt said the association supports arming consumers with information that will help them make sound decisions about checking and other financial services. She reminded that credit unions already are offering the types of accounts and information CFPB is pushing in today's statements.
"Credit unions' very livelihood depends on their member-owners having the information and services that will help them meet their financial goals," Hunt said. "Credit unions remain the best choice for consumers seeking low- or no-fee checking, and the majority of those offering overdraft services also offer alternatives such as overdraft lines of credit and linked savings accounts."
Hunt said NAFCU is in ongoing contact with CFPB officials and staff on this issue as it seeks to ensurecredit unions' unfettered ability tomeetthefinancial services needs of their members.
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