The Consumer Financial Protection Bureau announced that it will be carefully watching how banks are operating overdraft protection programs to ensure consumers are not paying too much in fees for their free checking accounts.
"With these free checking accounts, much of the costs to the consumer were buried in overdraft fees," Raj Date, the defacto chief of the bureau, said, ChicagoTribune.com reports. "Going forward, the bureau will carefully assess how we can best ensure that the overall market for short-term credit is fair, transparent and competitive."
Date said that one the CFPB’s biggest priorities is to set guidelines for banks to make sure consumers know what is happening when they are accumulating overdraft fees.
The Federal Deposit Insurance Corp. issued a report in 2008 revealing that 75 percent of banks automatically enrolled customers in overdraft protection programs without the customer’s knowledge in many cases. The average overdraft fee at that point was $27, ChicagoTribune.com reports.
In response to the report, the FDIC and the Office of the Comptroller of the Currency gave the banks two separate sets of guidelines for overdraft fees.
Banks have complained that the different rules are confusing and give them a disadvantage against banks that are not regulated by the agencies.
Date said that the bureau will look at the different sets of rules for banks and see which works better for consumers.
"If we find that additional action is needed, we will act," Date said, ChicagoTribune.com reports.