ABA to the Agencies: Don’t Add New Overdraft Program Requirements

ABA asked the heads of the banking regulators and the CFPB to back away from adding new requirements on overdraft protection programs beyond the rule change that the Federal Reserve implemented last August.

The Fed’s rule to regulate overdraft programs is “a strong, simple standard” that empowers consumers to make voluntary choices about coverage and informs them about options and fees, Wayne Abernathy, ABA EVP for financial institutions policy, said in a letter.

But despite participating in the that rulemaking, and without studying Fed rule’s impact, the Office of Thrift Supervision, FDIC and recently the Office of the Comptroller of the Currency have each proposed supervisory “guidance” imposing additional obligations on the operation of overdraft programs, Abernathy explained.

“Now, instead of one clear rule applicable to all overdraft protection programs, four different regulatory standards are emerging … ,” he said. The added “mandates create a moving target for compliance and add unnecessary costs to a program that customers, pursuant to the [Fed] rule, have chosen to use … with full information about its costs, consequences and options.”

“[W]e urge a reassertion of the interagency mission of the [Federal Financial Institutions Examination Council] banking agencies, including the new [CFPB], to apply a uniform set of supervisory expectations to the enforcement of this and other consumer regulatory standards,” Abernathy said. (ABA attached its comment letter on the OCC’s proposed guidance on deposit-related consumer credit products.)

Read the letter.
Read ABA’s OCC comment letter.