UPDATE 1-US consumer watchdog says it will review banks ‘blockbuster’ overdraft fees
(Redesigned title and first paragraph, add details, quotes.)
By Katanga Johnson
Dec. 1 (Reuters) – The U.S. Consumer Financial Protection Bureau (CFPB) to release new guidelines aimed at reducing banks’ reliance on overdraft and insufficient funds (NSF) fees that lenders impose on consumers his senior official said on Wednesday. .
Rohit Chopra added that he had also tasked the regulator’s bank examiners to prioritize lenders who are too dependent on these fees, whose banks brought in $ 69 billion in the third quarter.
The agency also hopes that impending changes to data sharing rules aimed at boosting competition among lenders will make it easier for consumers to get rid of banks that overcharge them.
“The (consumer watchdog) is considering a series of regulatory interventions to help restore meaningful competition in this part of the check market, rather than allowing large institutions to forever rely on overdraft fees and income. insufficient, “said Chopra.
Chopra pointed out that a “successful” third quarter far exceeded the $ 15 billion in 2019.
Also on Wednesday, Capital One Financial said it would eliminate all overdraft and NSF fees for consumers, ending a practice that angered U.S. lawmakers during a Senate hearing earlier this year.
Customers will have to choose whether they want to opt for the free overdraft protection service, chief executive Richard Fairbank said in a note, and must show a pattern of regular deposits to be eligible for it.
“Many in the market expect other big banks to stop (on overdraft fees) as well. CFPB is not hoping that will happen soon,” Chopra added.
Industry groups have criticized any potential CFPB initiative to introduce “stifling” rules that could hamper competition and innovation for the benefit of American consumers.
“Other than overdraft, there are few options left for consumers to meet their short-term liquidity needs within a well-regulated and well-supervised banking system,” said Richard Hunt, who heads the Consumer Bankers Association, based in Washington. (Additional reporting by Niket Nishant in Bengaluru, Elizabeth Dilts Marshall in New York Editing by Amy Caren Daniel)