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CFPB Issues Fees Guidance on Overdraft and Depositors

CFPB Issues Fees Guidance on Overdraft and Depositors

Posted: Nov 09 2022
The CFPB has issued guidance regarding certain overdraft and depositor bank fees, calling the fees “are likely unfair and unlawful.”  The guidance is part of a broader Biden administration announcement directing federal agencies to act against so-called “junk fees” and “surprise billing" in several industries, including banking, cable and internet bills, and airline and concert tickets.

According to the guidance, financial institutions may engage in an unlawful practice when they authorize a transaction on sufficient funds in the customer’s account but charges an overdraft fee when the transaction posts against insufficient funds in the account (“authorized positive, settled negative,” (APSN) transactions).  In addition, the Bureau states that financial institutions “can generally stay on the right side of the law when they employ more tailored fee policies that charge depositor fees only in situations where a depositor could have avoided the fee, such as when a depositor repeatedly deposits bad checks from the same originator.”

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