CUNA wrote to the Consumer Financial Protection Bureau (CFPB) Thursday with suggestions for additional data development and analysis in order to promote shared understanding of overdraft services. CUNA—along with other financial services trade organizations—called on the CFPB to conduct a study of consumer preferences regarding overdraft.
“Restrictions on overdraft may lead financial institutions to stop offering these services to their customers, which would result in significantly more returned checks and declined transactions,” the letter reads. “This may lead to unnecessary credit rating harm; returned item fees charged by the institution or by the merchant; fees from landlords and others; or requirements to pay using alternative methods such as money order.”
The organizations urge the CFPB to gather additional data before any further action is taken, especially on the regular use of overdraft protection.
“We recommend that the Bureau focus on frequent users of overdraft, which constitute approximately 9% of all overdraft users, according to a 2017 Bureau report, in order to develop data on regular users, the people that will be most affected by any changes to the regulatory treatment of overdraft.
The organizations suggested the CFPB research: