Breaking News! Overdraft, NSF Fees Scrutiny Enhanced by CFPB
CUNA Mutual Group Alert: The Consumer Financial Protection Bureau (CFPB) recently communicated that they’ll be enhancing its supervisory and enforcement scrutiny of financial institutions that are heavily dependent on overdraft and non-sufficient funds (NSF) fees. In recent years, the CFPB ordered TD Bank to pay $122 million in penalties and customer restitution and ordered TCF Bank to pay $30 million in penalties and restitution.
An estimated $15.47 billion in overdraft and NSF revenue was collected in 2019, according to CFPB research.
Credit unions have already been facing challenges in the form of class action litigation related to overdraft / NSF fees dating back to 2012. Law firms continue to send demand letters threatening a lawsuit and/or filing a lawsuit against credit unions alleging members were improperly assessed overdraft and/or NSF fees.
To learn more about the allegations, and risk mitigation tips, review our previously-issued November 16, 2021 RISK Alert: Overdraft / NSF Fee Class Action Litigation Not Slowing Down for CUs.
Many financial institutions – including credit unions – are considering or have implemented changes to their overdraft / NSF fees. For example, these financial institutions recently announced changes: Capital One communicated that they will eliminate overdraft fees and Alliant Credit Union eliminated overdraft fees for all Alliant checking and savings accounts.
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