Hsu pushes back on overdraft “junk fee” label
Improving fairness will achieve pro-consumer services
Acting Comptroller of the Currency Michael Hsu pushed back against President Joe Biden and CFPB Director Rohit Chopra’s labeling of overdraft fees as “junk fees,” saying that forcing banks to stop offering overdraft protection should not be the goal of regulators.
In his remarks on March 30 at a Washington, D.C., economic conference, Hsu stated that rather than eliminate these programs and fees, banks should focus on updating their overdraft solution to make it more friendly to consumers and avoid regulatory risk.
APSN & re-presentment fee risk continues
Noting that “not all overdraft practices are equally risky,” Hsu went on to discuss two topics that JMFA has been covering for several years: Authorize Positive, Settle Negative (APSN) fees, and multiple re-presentment fees. Practices surrounding these two issues can create risk — but they can also be addressed with updated processes and clear disclosures.
Hsu mentioned a third potential risk with overdraft practices that we have also been advising our clients on: the lack of fee caps that may be assessed in a single day. Capping fees is a solution that is fairer for consumers and more indicative of a valuable service rather than an expensive penalty.
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