Regulator seeking ways to protect consumers from excessive bank fees
In a recent blog post, the Consumer Financial Protection Bureau (CFPB) indicated it is taking action to protect consumers from excessive banking fees, especially overdraft and insufficient funds fees.
The move comes following the release of two reports on banking practices and is designed to improve the customer experience at banks.
As the CFPB noted:
"These often exploitative and hidden fees can have a significant impact on a family’s bank account, and as a result, we have been closely monitoring those institutions."
Specifically, the CFPB is examining five key metrics on the customer experience in banking. These include:
Total annual dollar amount consumers receive in overdraft coverage compared to the amount of fees charged.
Annual dollar amount of overdraft fees charged per active checking account.
Annual dollar amount of NSF fees charged per active checking account.
Prevalence of frequent overdrafters: the share of active checking accounts with more than 6 and more than 12 overdraft and/or NSF fees per year.
Share of active checking accounts that are opted into overdraft programs for ATM and one-time debit transactions
Finally, the CFPB noted that a number of banks are already moving away from or reducing overdraft and NSF fees.
"We’re encouraged that some banks and credit unions are competing for consumers’ business by changing their overdraft and NSF programs. We will evaluate how these changes are implemented. Many banks have yet to improve their practices. Our hope is that by the Bureau collecting and sharing these metrics, institutions can better understand the impact of their overdraft practices on their consumers relative to their peers, and that this knowledge further boosts competition and improves outcomes for American families."
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