CFPB considering overdraft protection measures

Richard Cordray

Consumer Financial Protection Bureau Director Richard Cordray, in response to questions at a Feb. 8 virtual town hall meeting sponsored by the NCUA, said that the agency is contemplating how to act on mounting regulations covering overdraft protection and checking account disclosures.

Cordray said that the agency is concerned about some practices by financial institutions that clear checks in an order that incurs higher overdraft fees for customers, Credit Union Times reports.

Cordray said that the CFPB, which may issue proposed rules later in the year, does not plan to duplicate existing rules. Cordray also said that overdraft regulations and checking account disclosures will be part of the CFPB’s “Know Before You Owe” program, which already includes mortgage and student loan disclosures, as well as credit card agreements.

While the CFPB has the authority to regulate practices, it does not have the authority to set prices or interest rates on financial products, a measure of the Dodd-Frank that Cordray says he is comfortable with, according to Credit Union Times.

Cordray also said that the CFPB would consider a time extension for credit unions to respond to member complaints, as one questioner pointed out that volunteers at credit unions may take longer to handle such an undertaking.

Several hours before the town hall meeting, a House financial committee discussed bills before Congress that would make several changes to the CFPB, including reassigning the CFPB under the U.S. Treasury and removing Cordray from the board of the Federal Deposit Insurance Corporation.

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