Bass, Berry & Sims attorney John Speer authored an article on the Consumer Financial Protection Bureau's (CFPB) criticism of overdraft practices and the fees generated from them. On February 3, the CFPB sent a letter to 25 of the largest retail banks in the nation encouraging them to provide alternative accounts without overdraft prevention and advertise those "low-risk" alternatives to reduce the use of overdraft programs by consumers. Following this letter, the CFPB announced its "two-year policy priorities," which further implement the rules set forth related to overdrafts, as well as outlines how the Bureau will use its rule-making authority to accomplish its objectives. As John explains in the article, "[w]hile the CFPB does not have regulatory or supervisory authority to require banks to offer or eliminate particular services or to control the fees charged for them, it has identified parts of overdraft programs, including the fees charged, and their negative affect on consumers that require action on its part."
The full article, "CFPB Targets Overdraft Programs," was published by Law360 on March 14, 2016, and is available online.