CFPB Releases Comparison of Banks’ Overdraft Fees and Policies

On February 10, 2022, the Consumer Finance Protection Bureau (“CFPB”) released a blog outlining its recent approach to regulation surrounding overdraft fees and policies, echoing its previous sentiments on such matters and affirmed its commitment to continue fostering change.

Additionally, the CFPB provided a table comparing the overdraft and insufficient funds fees and policies of 20 large banks, which revealed that:

• two banks have no overdraft fees on any transactions;

• nine banks have no NSF fees;

• four banks have no overdraft fees on debit card purchases;

• five banks have no overdraft fees on ATM withdrawals;

• 13 banks have no extended or sustained overdraft fees;

• the overdraft or NSF fees included one bank having a $10 charge and 12 banks having a charge ranging from $32 to $39;

• each bank presenting a range of daily limits on the number of overdraft or NSF fees that could be assessed and the amount of these fees;

• nine banks holding a nominal cushion of $5 or less before the fee could be charged; and

• eight banks having an “extended grace period” where the consumer has until the next day to correct the overdraft before fees would be assessed.

Although these banks have differing policies for attaching additional fees to a consumer’s use of their financial services, the provision of these categories by the CFPB indicates that these categories are the areas of concern for the regulatory body, which will be considered in assessing the “fairness” of an institution’s policies. Financial institutions should review their policies with attention to these categories.