Sen. Brown Bill Calls for CFPB Crackdown on Overdraft (July 25, 2013)
July 25, 2013
U.S. Sen. Sherrod Brown (D-Ohio) this week announced legislation that would prevent “predatory” overdraft practices by banks, such as reordering consumers’ debit card transactions to increase the likelihood that they will overdraw their accounts and incur fees.
“Banks should play by the rules instead of purposefully ‘reordering’ their consumers’ debit card transactions so that they profit while consumers rack up costly penalties,” said Brown, who is chairman of the Senate Banking Subcommittee on Financial Institutions and Consumer Protection.
Brown’s bill would enable the Consumer Financial Protection Bureau (CFPB) to “crack down on banks that employ predatory practices” and empower the bureau to establish guidelines protecting consumers and the banks and credit unions that “play fair with their customers,” he said.
Last month, the CFPB released a study that raised concerns about financial institutions’ overdraft practices and fees. The agency’s 72-page Study of Overdraft Programs analyzed data from a sample of large banks, combined with anonymous transaction information from random samples of consumer checking accounts at these same banks.