Steve H. Powell & Company

  • Contact
  • About us
  • Management
  • Services
    • Loan Review
    • Compliance
    • Due Diligence
    • ALLL Methodology
    • Strategic Planning
  • Newsletter
  • Blog
  • Contact
  • About us
  • Management
  • Services
    • Loan Review
    • Compliance
    • Due Diligence
    • ALLL Methodology
    • Strategic Planning
  • Newsletter
  • Blog

​

CFPB Issues Guidance on Authorized Positive Settle Negative Overdraft Fees

11/11/2022

0 Comments

 
Author: Andrew Howard

On October 26, 2022, the CFPB published a circular concerning the assessment practices of unanticipated overdraft fees, all financial institutions should read this guidance; however, its generally only applicable to institutions with an overdraft program which use the available balance for determining overdrafts. These are the same overdraft fees that the CFPB referred to as “surprise overdraft fees” in its recent $191 million order with Regions Bank. The FDIC has also weighed in on these types of overdraft fees in a 2019 Consumer Compliance Supervisory Highlights publication. “APSN” or, authorize positive settle negative, is the occurrence of a transaction that authorizes on a positive balance but settles on a negative balance, thus incurring a fee. The fee(s) charged for APSN transactions have been considered unfair and abusive by the CFPB and can be considered as such even with the presence of clear disclosures. The circular highlights that although a bank may provide disclosures related to transaction processing and overdraft assessment policies, these may still leave the consumer in doubt of when their transactions will post and will they incur fees. The October circular notes that considering the complex systems used by financial institutions, examiners should closely scrutinize whether and when charging overdraft fees may be contrary to Federal consumer financial law.  Considering the general policy statements and blog posts, banks should analyze their fee polices to identify any fees that could be considered “unanticipated” or “junk” fees.
​
The CFPB continues to “promulgate” via policy statements, circulars, and the like; however, clear guidance via law or regulation seem to not be a priority. By only issuing these policy statements, which do not impose any legal requirements, the CFPB has made it difficult for banks that are seeking to comply with the rules.  However, in an October press release The White House has noted NSF fees, overdraft fees, and credit card late payment fees as “junk fees”. We will all have to wait and see if any law or regulation is promulgated or if additional guidance will be provided by the CFPB or any of the other prudential regulators on these issues.
 
For more information, please visit the following links:
Circular 2022-06
FDIC Consumer Compliance Supervisory Highlights
Regions Order
0 Comments



Leave a Reply.

    Past Articles

    All
    2017 DBF Final Rulemaking
    2017 TRID Final
    2017 Updated Guide For Servicing Rules
    2018 Compliance Updates
    April 2018 TRID Rule
    Beneficial Ownership Relief Extension
    Cashing Checks
    CFPB Annual Privacy Notice
    CFPB Prepaid Account Rule
    Commercial Real Estate
    CRA Lobby Notice
    CRE Concentrations
    Final Arbitration Rules
    FinCEN Finalizes Beneficial Ownership Relief
    HMDA Proposed Changes
    New HMDA Interpretive Rule
    Reg CC Reminder
    Regulation CC Final
    Restoration Of PTFA
    Rising Interest Rates Reg E
    SARs Data Fields
    SARs On Cyber Crime
    Second FAQs For Beneficial Ownership
    The Military Lending Act
    Visa Gross Negligence Change
    Visa & MasterCard Card Updater Services

    Archives

    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    July 2021
    May 2021
    February 2021
    January 2021
    October 2020
    August 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    March 2019
    January 2019
    September 2018
    August 2018
    June 2018
    May 2018
    April 2018
    February 2018
    January 2018
    October 2017
    August 2017
    July 2017
    June 2017
    March 2017
    February 2017
    October 2016
    September 2016
    August 2016
    June 2016

    RSS Feed

Powered by Create your own unique website with customizable templates.