Magazine article American Banker

Bankers, Consumer Advocates Debate Overdrafts at CFPB Roundtable

Magazine article American Banker

Bankers, Consumer Advocates Debate Overdrafts at CFPB Roundtable

Article excerpt

Byline: Jackie Stewart

NEW YORK a Bankers, consumer advocates and other industry members gathered on Wednesday to hear officials from the Consumer Financial Protection Bureau outline their concerns about overdraft practices.

The agency said Wednesday that it was targeting banks' overdraft protection practices, and CFPB Director Richard Cordray traveled to Manhattan that same day to host a roundtable discussion about the new probe.

Following his prepared remarks, consumer advocates weighed in. Sarah Ludwig, executive director of the Neighborhood Economic Development Advocacy Project, said that "the abusive overdraft protection is yet another way banks fail to serve low income people and communities." She provided an example of someone who had contacted her group last month, who had accumulated $1,390 in overdraft fees in two months as a customer at a "large national bank."

Susan Weinstock, project director at Pew Charitable Trusts, said her group has developed a model disclosure box for key fees and conditions for a checking account, which includes clearly outlining overdraft protection.

Bankers also attended the event. Andrew T. Rowe, a senior vice president at Bank of America Corp., said that in 2009 his company began "talking directly to our customers about how they felt about our current overdraft practices. What they told us was they did not like to be surprised by being charged for spending money they don't have. As a result, we made the decision to eliminate overdraft at the point of sale. …

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