Seeking Alpha

Bank (C, BAC, JPM, WFC) overdraft protection raises the eyebrows of the CFPB, which...

Bank (C, BAC, JPM, WFC) overdraft protection raises the eyebrows of the CFPB, which questions how lenders are selling this product and whether fees can really be anticipated and thus avoided. The bureau notes consumers who opt in to such programs end up paying more in costs. "What is ofter marketed as overdraft protection may actually be putting consumers at greater risk." As of yet, no action or fines have been announced.
From other sites
Comments (7)
  • pigeonguy
    , contributor
    Comments (149) | Send Message
     
    CFPB needs to grow up and get a life. Why do some people get overdraft protection? Because they keep to little funds in their account and one math error or failure to enter one check causes the checks to bounce. There are others that just look at their balances on line and don't even subtract the checks in their book. When a few checks are not cashed quickly then kaboom checks are bounced. Over draft protection prevents the embarrassment of having checks bounce. I don't pay for overdraft protection but one can certainly see why many people do.
    11 Jun 2013, 10:05 AM Reply Like
  • jackooo
    , contributor
    Comments (1709) | Send Message
     
    Most people figure if they have checks in their checkbook, they have money in the bank!!!
    11 Jun 2013, 10:22 AM Reply Like
  • gwynfryn
    , contributor
    Comments (5232) | Send Message
     
    Why not? That's how fiat money works!
    15 Jun 2013, 09:32 AM Reply Like
  • slash32is4
    , contributor
    Comments (189) | Send Message
     
    lets keep helping the irresponsible at the cost of the responsible... makes sense
    11 Jun 2013, 10:44 AM Reply Like
  • fjdietz
    , contributor
    Comments (2) | Send Message
     
    Pretty funny if that is the best the CFPB can come up with! CFPB raising eyebrows over a very good tool for consumers and small businesses having a fair and reasonable cost. CFPB appears to be a giant waste of taxpayers' money - just like so many other bloated federal bureaucracies are.
    11 Jun 2013, 10:48 AM Reply Like
  • MexCom
    , contributor
    Comments (3067) | Send Message
     
    The CFPB seems to have nothing productive to do. An Elizabeth Warren placate move, IMHO.

     

    In reality overdraft protection has been a great service where the extra handling of bank work probably is barely covering the cost while the consumer gets the automatic loan and saves money from a bounced check. The bank in costing their services to consumers are in competition with other banks and credit unions. They set their fees to provide an advantageous service to their customers else lose them to the competition.

     

    What they should do is make the banks levee a hefty fee for overdrawing their accounts to teach them a lesson that they need to negotiate their debt payment without penalty or to provide additional funds in their account before they write the check. A second offence should prosecute the repeat offender for check fraud with a mandatory jail sentence.

     

    Banks are very clear in what they provide and the rules. They are not running a kindergarten like the CFPB. This relatively new government agency is on thin ice if they want to actually provide some service to commerce. But this example is showing that maybe they are going to do more harm than good and should be eliminated. We need help for economic recovery not more red tape and unecessary regulations.
    11 Jun 2013, 10:55 AM Reply Like
  • floaero
    , contributor
    Comments (7) | Send Message
     
    I agree that CFPB should be eliminated. It's red tape that has hurt all of us during this recession. As for overdraft protection costs, mine is free and I think everyone should know whether they need it or not. If your balance is low you need to take action to prevent an overdraft fee. It's called being responsible.
    11 Jun 2013, 12:22 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs