Nacha News

Nacha creates broadly adopted payment and financial messaging rules and standards through consensus-led governance, international collaboration, and innovative development practices. We continually advance the ubiquitous ACH Network and engage diverse stakeholders to accelerate a digital future of global financial services interoperability.

CFPB Releases Prototype Model Disclosures & Report on Overdraft Costs

On Aug. 4, 2017, CFPB released prototype model disclosures aimed at helping consumers better understand the pros and cons of optional overdraft coverage for checking accounts. These model disclosures are not mandated but are meant to serve as a tool for financial institutions and credit unions.
CFPB also released a report on overdraft costs. The report states that consumers who frequently overdraw their checking accounts typically pay almost $450 more in annual fees by opting into coverage for debit card and ATM overdrafts. Frequent overdrafters, which the CFPB defines as people with more than 10 overdrafts or rejected transactions a year, account for only 9 percent of all account holders but paid 79 percent of overdraft and bounced-check fees, according to a Bureau’s report.
A potential rule on overdraft practices has been delayed several times since CFPB first inquired in 2012. Cordray told Nacha’s GRAG in an in-person meeting that they were still looking at overdraft in a pre-rule environment. GR staff doubts that any action on overdraft will occur during Director Cordray’s remaining months at CFPB (term expires in a year and he is likely to resign this Fall to run for Governor).