The CFPB is currently seeking public comment regarding banks’ overdraft programs, as well as their pros, cons and risks to consumers. Additionally, the agency is reviewing the overdraft policies of America’s largest banks to determine whether further regulation is needed, Credit Union Times reports.
Rep. Carolyn B. Maloney (D- N.Y.) has introduced the Overdraft Protection Act of 2012, which would require the CFPB to examine pre-paid overdraft programs and would limit the amount of overdraft fees that a single consumer may incur.
In 2005, the Federal Deposit Insurance Corp. “reaffirmed” a best-practices document that included risk-mitigation techniques that it expected U.S. banks to implement. Some of those techniques include the use of technology to alert consumers of a low account balance, consideration of the elimination of overdraft fees for transactions that overdraw just a small amount and customer counseling if the account is overdrawn regularly, according to Credit Union Times.
The FDIC expected those institutions under the regulator’s supervision to have those techniques in place before July 1, 2011.