On June 16, 2022, the CFPB released an article focusing on the agency’s efforts to collect key metrics from some supervised institutions regarding the consumer impact of their overdraft and non-sufficient fund (NSF) practices. In early December of 2021, we wrote an article about the CFPB’s research on banks’ dependence on overdraft fees. Since then, the Bureau has been actively conducting close supervision to financial institutions with high shares of frequent overdrafters or with higher average fee burden for overdrafts.
According to the CFPBs blog post, they have asked over 20 institutions for data on five consumer-impact metrics:
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; and
Share of active checking accounts that are opted into overdraft programs for ATM and one-time debit transactions.
In addition to these metrics, the CFPB’s Supervision team is seeking detailed information about entities’ overdraft practices, such as how they assess their fees, their grace periods, the dollar thresholds above which fees are assessed, and caps on the number of fees charged per day, or per statement period. The Bureau will use this information to identify institutions for further examination and review, provide feedback to each institution, and share with other regulators.
Read the CFPB’s full article here.
