Written by Bernadette Clair, Regulatory Compliance Counsel
We’ve previously blogged about the CFPB’s inquiry into overdraft services, but today I thought we’d take a closer look at the model disclosure form the CFPB is testing in conjunction with its inquiry – aptly named the “penalty fee box.”
This draft disclosure, designed to highlight the amount overdrawn and total overdraft fees charged, would require the following three disclosures at the top of each periodic statement:
- A disclosure of the amount of overdraft fees paid during the billing cycle;
- A disclosure of the amount the account was overdrawn; and
- A disclosure that “You can lower these fees. See the three tips at the end of this statement to learn how.”
The end of the periodic statement would include an additional disclosure, spanning approximately half of one page. This disclosure provides additional details regarding the overdraft fees the member paid during the statement period and the calendar year and includes three tips for lowering overdraft fees:
- Tracking balances and deposits carefully and signing up for text message alerts to warn when the balance is low;
- Linking a savings account to your checking account; and
- Consider opting out of overdraft coverage on debit or ATM transactions.
If you thought the last round of periodic statement changes to disclose overdraft fees was bad, the potential formatting requirements on this one could really drive you nuts!
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Make Your Voice Heard – Call for Comments
Speaking of the CFPB’s inquiry into overdrafts, there are a few comment deadlines coming up over the next several weeks. NAFCU is seeking its members’ input on the following:
- CFPB’s Proposed Rule on the Confidential Treatment of Privileged Information, designed to assure financial institutions that, in providing the CFPB information in the course of a supervisory or regulatory process, they do not waive any privilege they may claim regarding that information. Comments are due to NAFCU April 4. Comments are due to the CFPB on April 16. (Regulatory Alert 12-EA-08)
- CFPB’s Inquiry on Overdraft Protection Programs, seeking information on how overdraft programs are set up, how they are marketed and who uses them. The bureau is also testing the model “Penalty Fee Box” discussed above. Comments are due to NAFCU April 6. Comments are due to the CFPB April 30. (Regulatory Alert 12-EA-07)
- FinCEN’s Advance Notice of Proposed Rulemaking on Customer Due Diligence (CDD). FinCEN is considering whether to expand its rules on CDD. It is looking, for example, at whether to require identity of the beneficial owners in all transactions and verifying that identity in risk-based fashion. Comments are due to NAFCU April 17. Comments are due to FinCEN May 4. (Regulatory Alert 12-EA-09)
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NAFCU Members. Our Regulatory Affairs team has updated NAFCU’s webpage on the CFPB. This webpage is a great resource for keeping up-to-date on the CFPB’s activities and NAFCU’s efforts to mitigate new regulatory burdens for credit unions. Here, you’ll find:
- Regulatory Alerts on CFPB proposed rules
- Comment letters
- Member Resources
- News
- Links to resources on the CFPB’s website
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