Attempts to reign in “phantom opt-in” agreements in updated legal interpretation.
The Consumer Financial Protection Bureau (CFPB) released a new guidance this month, cautioning banks not to charge overdraft fees without express consumer consent. This guidance represents the bureau’s new reading of existing consumer protection laws, a new avenue for President Biden’s administration to continue reducing so-called “junk fees.”
Overdraft fees are common in the banking sector, and consumers often expressly agree to be subject to them when accepting the terms and conditions of a bank account. However, the CFPB has found that some banks employ overdraft fees even when they were not consented to, using tactics that the agency has dubbed “phantom opt-in” agreements.
“The CFPB has found instances where banks have no evidence that they obtained consent for overdraft,” CFPB Director Rohit Chopra stated. “No Americans should be hit with bank account fees that they never agreed to.”
As the Lord Leads, Pray with Us…
- For Director Chopra to seek God’s guidance as he heads the Consumer Financial Protection Bureau.
- For U.S. banking officials to follow the laws and regulations regarding consumer fees.
Sources: Reuters, American Banker
