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Financial Services Industry Insufficient Funds Banks

Goodwin

CFPB Issues Guidance Emphasizing the Importance for Banks to Maintain Sufficient Proof of Customers’ Affirmative Consent to...

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In recent discussions surrounding banking practices, the issue of overdraft fees, particularly for ATM and one-time debit card transactions, has gained significant attention....more

Orrick, Herrington & Sutcliffe LLP

California bans state banks and credit unions from charging NSF fees

On September 24, the Governor of California signed AB 2017 (the “Act”) into law, prohibiting state-chartered banks and credit unions from charging NSF fees when consumers initiate transactions that are instantaneously or near...more

Orrick, Herrington & Sutcliffe LLP

Bank agrees to overdraft fee settlement for $1.5M

On July 25, a bank agreed to a class action settlement relating to overdraft fees in a case filed in May 2022. If the court approves, the settlement will provide $1.5 million to the class via a settlement fund. The lawsuit...more

Orrick, Herrington & Sutcliffe LLP

House questions CFPB's rules on NSF fees and impact on small businesses

On May 9, the House Committee on Small Business expressed concerns in a letter addressed to CFPB Director, Rohit Chopra, on a proposed rule that would ban charging insufficient fund fees (NSF fees) on declined transactions...more

Orrick, Herrington & Sutcliffe LLP

District Court grants bank a MSJ in overdraft fee class action case

On April 16, the U.S. District Court for the Eastern District of Michigan entered an opinion and order granting defendant bank’s motion for summary judgment in an overdraft fee-related consumer class action. In this case,...more

Orrick, Herrington & Sutcliffe LLP

Seventeen State Attorneys General comment on CFPB overdraft proposal

State Attorneys General from 17 states recently sent a letter to the CFPB endorsing its proposed rule to amend TILA. The 17 states included New York as principal, California, Colorado, Connecticut, Delaware, the District of...more

Ballard Spahr LLP

California AG issues warning to state-chartered banks and credit unions on “surprise overdraft” and returned deposit item fees

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On February 22, 2024, California Attorney General Rob Bonta issued letters (the “AG Letter”) to California’s 197 state-chartered banks and credit unions warning that overdraft and returned deposited item fees may violate...more

Mayer Brown

CFPB Proposes Latest Rule in Initiative Against So-Called “Junk Fees”

Mayer Brown on

On January 24, 2024, the Consumer Financial Protection Bureau (“CFPB”) launched the latest salvo in its war against so-called “junk fees” by issuing a proposed rule that would prohibit financial institutions from charging...more

Ballard Spahr LLP

FTC bans group of student loan debt relief scammers from the debt relief industry

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The Federal Trade Commission (“FTC”) recently entered into proposed stipulations with a group of student loan debt relief providers to resolve allegations that the group conducted deceptive marketing and sales practices in...more

Cooley LLP

CFPB Issues Proposal to Eliminate Fees on Instantaneously Declined Transactions

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On January 24, 2024, the Consumer Financial Protection Bureau (CFPB) issued a notice of proposed rulemaking that would prohibit financial institutions from charging fees on transactions that are declined instantaneously or...more

Orrick, Herrington & Sutcliffe LLP

CFPB proposes rule making certain NSF fees “abusive”

On January 24, the CFPB released a proposed rule that would identify the charging of non-sufficient funds (NSF) fees on transactions that financial institutions decline instantaneously or near-instantaneously as an “abusive”...more

Orrick, Herrington & Sutcliffe LLP

Large bank agrees to proposed settlement agreement; to be decided in February

On November 27, 2023, a large Canadian bank agreed to pay $15.9 million to accountholders in a proposed settlement agreement stemming from a class action suit in which the bank allegedly charged improper non-sufficient fund...more

Ballard Spahr LLP

CFPB reported to be planning to unveil overdraft regulations before year-end

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Last week, Bloomberg Law reported that “Consumer Financial Protection Bureau officials have privately told industry executives that the regulator will likely unveil its long-awaited plan to crack down [on overdraft fees] in...more

Orrick, Herrington & Sutcliffe LLP

Court orders credit union to pay $5 million to settle overdraft allegations

On June 27, the U.S. District Court for the Northern District of New York granted final approval of a class action settlement, resulting in a defendant credit union paying approximately $5.2 million to settle allegations...more

Orrick, Herrington & Sutcliffe LLP

FDIC revises NSF guidance

On June 16, the FDIC updated its Supervisory Guidance on Multiple Re-Presentment NSF Fees to clarify its supervisory approach for addressing violations of law. This new guidance, FIL-32-2023, updates FIL-40-2022 (originally...more

Orrick, Herrington & Sutcliffe LLP

CFPB says overdraft/NSF revenue has been cut in half

On May 23, the CFPB published another data spotlight reporting on overdraft/non-sufficient fund (NSF) fee trends. Earlier in the month, the Bureau examined low- and moderate-income consumers’ experiences with overdraft...more

Ballard Spahr LLP

OCC and FDIC address overdraft and NSF fee practices

Ballard Spahr LLP on

The OCC has issued a new bulletin and the FDIC has issued new supervisory guidance directed to their supervised institutions to address “authorize positive, settle negative” (APSN) overdraft fee practices. The OCC bulletin...more

Ballard Spahr LLP

CFPB report of decline in bank revenues from overdraft and NSF fees follows President Biden’s targeting of “junk fees” State of...

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In a new report published last week titled “Banks’ overdraft/NSF fee revenue declines significantly compared to pre-pandemic levels,” the CFPB reported that its most recent analysis found that bank overdraft/NSF fee revenue...more

Orrick, Herrington & Sutcliffe LLP

CFPB reports drop in overdraft/NSF revenue from pre-pandemic levels

On February 7, the CFPB published a “Data Spotlight” reporting that bank overdraft/non-sufficient fund (NSF) fee revenue has declined significantly compared to pre-pandemic levels. ...more

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