DOEREN MAYHEW
79 %
of combined overdraft and NSF fees were paid by 9 % of consumers
$ 3.5B +
in estimated savings for consumers when the proposed rule is finalized reasonably anticipate , including overdraft fees on debit card or ATM transactions that “ authorize positive , settle negative ” or “ APSN ” transactions , likely violates the Consumer Financial Protection Act of 2010 prohibition against unfair practices . The agency has issued several enforcement actions and sued banks over overdraft program UDAAP concerns . In April 2023 , the Office of the Comptroller and Federal Deposit Insurance Corporation issued guidance advising overdraft fees charged on such transactions raise heightened risk of unfair , deceptive or abusive acts or practices .
Due to the evolution of the overdraft market and its impact on certain segments of the population , the CFPB is proposing significant changes to the overdraft-related exception to the definition of finance change in Regulation Z . The CFPB believes a blanket exception for all non-covered overdraft credit cannot be justified as an exception for a courtesy . Therefore , they are proposing to limit the exception from
Regulation Z , for very large financial institutions , to overdraft credit offered at a cost to the consumer not exceeding the institution ’ s costs and losses associated with providing such coverage .
Rule Applicability
The proposed rule would only apply to financial institutions with more than $ 10 billion in assets . The regulatory framework for overdraft credit offered by institutions with $ 10 billion or less in assets would not change . The CFPB estimates financial institutions with more than $ 10 billion in assets are responsible for more than two-thirds of total overdraft fee revenue .
Continued on page 4
VIEWPOINTS : REGULATORY COMPLIANCE EDITION | 03