CFPB Releases Overdraft Disclosure Prototypes
On August 4th the Consumer Financial Protection Bureau (CFPB) issued 4 new “Know Before You Owe” disclosure prototypes designed to provide consumers with more information about overdraft coverage. Each prototype is 1 page long and intended to clearly explain the costs and risks of opting into overdraft coverage. According to the CFPB, consumers who frequently attempt to overdraw their checking accounts pay about $450 more in fees than if they opted into debit card and ATM overdraft coverage. These prototypes should help consumers understand the potentially significant costs of opting in. Until these prototypes are finished being tested and potentially adopted into regulation, the current model form from 2010 continues to apply.
CLA’s financial institution regulatory compliance team assists banks and credit unions nationwide in establishing regulatory compliance programs, conducting compliance testing, and training staff on regulations. Justin Robinson is a member of CLA’s regulatory compliance team and can be reached at justin.robinson@CLAconnect.com.
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