Over the past few weeks, there has been a renewed focus (not that it ever really went away) by certain banking agencies on bank overdraft practices. First, the Consumer Financial Protection Bureau (CFPB) issued a press release discussing the reliance by banks on overdraft revenue, drawing from two recent research reports. One report was titled "Overdrafts/NSF Fee Reliance Since 2015," and the other was titled "Checking Account Overdraft at Financial Institutions Served by Core Processors." Current CFPB Director Rohit Chopra was quoted as saying, "Rather than competing on quality service and attractive interest rates, many banks have become hooked on overdraft fees to feed their profit model." He further stated, "We will be taking action to restore meaningful competition to this market." The press release concluded by stating, "The CFPB will be enhancing its supervisory and enforcement scrutiny of banks that are heavily dependent on overdraft fees," and then noted two enforcement actions it had taken in the past with respect to overdraft practices. Continue reading >