The CFPB has received several thousand comments on its proposed rulemaking on arbitration and is considering issuing a final rule in spring 2017, according to the bureau’s fall statement of regulatory priorities. It’s also continuing its research in preparation for a proposed rulemaking on overdraft programs for checking accounts, although the CFPB didn’t forecast the timing for an overdraft proposal.
Some industry experts believe the arbitration rule, which restricts covered institutions from including class action waivers in their arbitration agreements, could be one of the most significant regulations to come out of the bureau. In its comment letter, the NBPCA criticized the proposed rule, noting: “[W]e ultimately believe that the Proposed Rule will actually harm consumers by depriving them of what has proven to be a broadly applicable, effective, inexpensive and convenient method of resolving disputes, in favor of a more expensive, less convenient alternative which is not available to all consumers for all claims.”
Meanwhile, the treatment of overdraft as a trigger for Regulation Z coverage in the CFPB’s final rule on prepaid accounts could foreshadow the bureau’s plans for a proposed rule on overdraft for checking accounts. A 2013 white paper and 2014 report, both based on supervisory data from several large banks, highlighted a number of possible consumer protection concerns, including how consumers opt in to overdraft coverage for ATM and one-time debit card transactions, overdraft coverage limits, transaction posting order practices, overdraft and insufficient funds fee structures, and involuntary account closures, according to the bureau. The CFPB said it has begun qualitative consumer testing initiatives relating to the opt-in process, but the timing of any proposed rules on overdraft for checking accounts has yet to be established.
- NBPCA Criticizes Arbitration Proposal from CFPB
- Senate Dems Urge Quick Action on CFPB Arbitration Proposal
- CFPB’s Arbitration Proposal Faces Criticism in the U.S. House
- Santander Enforcement Could Preview CFPB’s Overdraft Intentions
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