Overdrafts Under Pressure Created by m.moebs on 1/8/2024 7:10:51 AM
The Consumer Financial Protection Bureau would like to bypass Congress on Regulations.
The CFPB report of December 19, 2023 is another installment to get this done.
The Federal Reserve established in 1969 overdrafts are credit but not a loan when Congress passed Truth in Lending.
Should Congress or Rohit Chopra, Director of the CFPB, determine this?
Happy New Year!
The CFPB Wants ODs to Be Loans
“All Financial Institutions must band together to stop the CFPB from hurting consumers by eliminating overdrafts entirely.”
Michael Moebs, Economist & Chair of Moebs $ervices, LLC (M$) a Private Financial Service Research Firm.
Lake Forest IL (January 7, 2024) Less than 3 weeks ago, the Consumer Financial Protection Bureau (CFPB) issued a report “Overdraft and Nonsufficient Fund Fees” claiming consumers are “surprised by overdraft fees.” The conclusion of the 90-page report is: “Despite their use as credit, most account overdrafts are exempt from the Truth-in-Lending Act’s Regulation Z, which is designed to promote the informed use of credit and make it easier for consumers to compare the cost of credit products.”
Overdrafts defined by the Federal Reserve are credit but not a loan. The CFPB wants to convert ODs to loans.
In preparation for the CFPB’s actions, Citibank started to purge unprofitable checking accounts. In 9 months, Citibank has closed over 2 million checking accounts, or 20% of its nearly 12 million consumer checking portfolio. The New York Times heavily criticized Citibank’s actions. Banks are charitable firms? READ FULL ARTICLE