Overdraft Fees

News & Analysis as of

CFPB supervisory report highlights violations in debt collection, consumer reporting, overdraft practices, mortgage origination,...

In its Winter 2015 Supervisory Highlights, which covers supervision work generally completed between July and December 2014, the CFPB highlights legal violations resolved using non-public supervisory actions involving debt...more

Special Alert Update: OCC Revises Guidance Regarding Consumer Protection Requirements to Overdraft Lines and Protection Services

On March 6, 2015, the OCC issued its revised “Deposit-Related Credit” booklet (“DRC booklet”) of the Comptroller’s Handbook, which replaced the “Deposit-Related Consumer Credit” booklet issued on February 11, 2015 (previously...more

International Bank to Pay $30 Million to Resolve Overdraft Fee Allegations

On March 2, an international bank agreed to pay $30 million to settle allegations that it changed the order in which customers’ debit transactions cleared in order to generate additional overdraft fees. According to the...more

Eleventh Circuit Ruling Gives Large Bank Another Chance at Arbitration

On an appeal of five putative class actions alleging the unlawful charging of overdraft fees on consumer checking accounts, On February 10, the U.S. Court of Appeals for the Eleventh Circuit vacated a lower court order...more

OCC Updated Examiner Guidance Includes New Overdraft Protection Program Requirements

In updated examiner guidance and examination procedures issued last week, the Office of the Comptroller of the Currency (OCC) directs its examiners to assess whether the overdraft protection and other deposit-related consumer...more

CFPB Expected to Issue New Overdraft Rules in July 2015

New rules on overdraft protections and fees are a top regulatory priority for the CFPB this year. In its Fall 2014 Rulemaking Agenda, the CFPB noted that they were, “continuing to research overdraft services and considering...more

Candid remarks from Director Cordray

Last week, Director Cordray spoke at a National Credit Union Administration town hall webinar. While his prepared remarks were not particularly revealing, the American Banker reported that Director Cordray was unusually...more

CFPB Hot Topics for 2015

Despite rumblings from the new Congress about reining in the Consumer Finance Protection Bureau (CFPB), the Bureau has indicated a packed agenda for 2015. Following an aggressive push in 2014, the attention of the CFPB...more

Special Alert: OCC Guidance Applies Consumer Protection Requirements to Overdraft Lines and Protection Services

On February 11, 2015, the OCC issued the “Deposit-Related Consumer Credit” booklet of the Comptroller’s Handbook, which replaced the “Check Credit” booklet. The booklet provides updated guidance and examination procedures...more

OCC Takes a Page from the CFPB’s Playbook on Overdraft Programs

On February 11, 2015, the Office of the Comptroller of the Currency (“OCC”) issued an “updated” installment to the Comptroller’s Handbook in a new booklet entitled “Deposit-Related Consumer Credit.” In doing so, the OCC stole...more

CFPB Fall 2014 rulemaking agenda indicates further delay in proposed debt collection and other rules

Based on the CFPB’s Fall 2014 rulemaking agenda, proposed rules dealing with payday loans/deposit advance products, overdrafts, and debt collection are still months away. The CFPB’s timetables for “prerule activities”...more

Rep. Maloney urges CFPB to limit overdraft fees and expand opt-in rules

Democratic Congresswoman Carolyn Maloney of New York sent a letter to Director Cordray yesterday urging the CFPB to limit overdraft fees and expand opt-in requirements as part of a proposed overdraft rule. In calling...more

U.S. Bank v. Indian Harbor: Insurers Face Another Restitution/Disgorgement Setback

In a recent decision, the United States District Court for the District of Minnesota held that insurers could not use the so-called restitution/disgorgement defense to avoid covering amounts that their insured bank agreed to...more

CFPB Report: Overdraft Fees “Impose Heavy Costs” on Consumers

Expressing concern about the cost to consumers of opting in to receive overdraft protection, the Consumer Financial Protection Bureau (CFPB) released a new report furthering speculation about regulatory action....more

CFPB Concerned Overdraft Opt-In Requirement Not Protecting Consumers

On July 31, the CFPB released its latest assessment of overdraft data it has collected from large banks. The report provides the following summary findings: ?Overdraft and non-sufficient funds (NSF) fees constitute the...more

CFPB releases more overdraft program data as a prelude to likely rulemaking

The CFPB moved closer to likely rulemaking on overdraft programs with the release late last week of a new report entitled “Data Point: Checking account overdraft.” The report is based on account-level and...more

U.S. Bank Wins Coverage Under Delaware Law For $55 Million Overdraft-Related Settlement

Three class actions were filed against U.S. Bank in 2009 with identical allegations. The plaintiffs claimed that instead of applying transactions in chronological order, the bank posted transactions from the highest amount to...more

Insurance Recovery Law - July 2014 #2

U.S. Bank Wins Coverage Under Delaware Law For $55 Million Overdraft-Related Settlement - Why it matters: In a victory worth tens of millions of dollars, a Minnesota federal court ruled that U.S. Bank is...more

Adding Overdraft to Existing Note = UDAP

Recently, the FDIC has identified a practice that it believes violates UDAP standards. Some bankers have looked at their integrated note/security agreement and observed that the collateral includes “other indebtedness”—which...more

Updated CFPB Rulemaking Agenda Adds Auto Finance Larger Participant Rule, Updates Timelines For Other Rules

The CFPB recently released its latest rulemaking agenda, which lists for the first time a larger participant rule that would define the size of nonbank auto finance companies subject to the CFPB’s supervisory authority. ...more

Regional FDIC Office Releases Overdraft Fee Guidance

Earlier this month the Kansas City Regional Office of the Federal Deposit Insurance Corporation (FDIC) released updated guidance on overdraft fees. The Regional Office noted that many changes have occurred in the...more

Georgia Carves Overdraft, Other Fees Out Of Usury Limit Applicable To State Banks

On April 15, Georgia Governor Nathan Deal signed HB 824, which amends state law to clarify that certain banking fees are not “interest” subject to the state’s usury cap applicable to state-chartered institutions. ...more

FDIC regional offices issue UDAP guidance on continuous overdraft fees

Based on the CFPB’s rulemaking agenda issued in December 2013, we continue to expect overdraft programs to be the subject of another CFPB white paper and/or an advance notice of proposed rulemaking this year. (In June 2013,...more

Massachusetts Division of Banks Sets Cap on Returned Check Fees Allowable for State-Chartered Banks

The Massachusetts Division of Banks established the maximum fee that state-chartered banks and credit unions are permitted to assess consumer accounts in connection with processing a dishonored check. ...more

EDNY Judge Substantially Narrows Claims In Consolidated Overdraft Class Actions

On March 5, the U.S. District Court for the Eastern District of New York held that the named plaintiffs lack standing to bring claims in a multidistrict class action alleging illegal overdraft practices by a national bank. In...more

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