The Consumer Financial Protection Bureau intends to crack down on financial institutions that charge the largest fees for overdrafts and is considering “a wide variety of regulatory interventions” to better supervise such fees, Director Rohit Chopra said Wednesday.
Chopra’s comments follow the release of two CFPB reports showing that credit unions and banks continue to rely on overdraft fees as a major source of revenue.
“Rather than competing on transparent, upfront pricing, large financial institutions are still hooked on exploitative junk fees that can quickly drain a family’s bank account,” Chopra said.
In the reports, the CFPB said that 60.9% of credit unions had an overdraft program, while 92.9% of smaller banks had such programs. The agency estimated that credit unions generated $2.37 billion in overdraft fees, while banks with less than $1 billion generated $1.13 billion. Overdraft fees at credit unions and small banks were 13% to 19% lower than at large banks, the agency said.
continue reading »