Removing Barriers Blog

CUNA Urges CFPB to Rely on More Current, Relevant Data as Part of Its Inquiry into Overdraft
Posted November 06, 2017 by mcarew

Last week, CUNA filed a  letter with the CFPB in response to its release of prototypes of the overdraft disclosure form, along with its most recent report on overdraft practices. While we noted a few substantive concerns with the prototypes themselves, our bigger issue is with the data the CFPB continues to rely on as it pursues potential changes in the area of overdraft programs. 

The overdraft study, released in August, utilizes transaction-level data from January 2011 to June 2012, provided by a small number of large banks. These are banks covered by the CFPB’s supervisory authority and do not include credit unions, thrifts, or banks with assets under $10 billion. We are very concerned with the CFPB’s approach to gathering information for its studies on overdraft. We strongly disagree with the CFPB’s reliance on limited, dated information from a single type of financial institution as a basis for pursuing changes that will affect thousands of institutions of varying type and millions of consumers. 

Thus, we urge the Bureau, which describes itself as a data driven agency, to refrain from instituting any policy decisions related to overdraft—or otherwise—based on years-old data. Further, we stress our belief that it is inappropriate to assume the practices of a few large banks are representative of the entire financial services industry. As such, any efforts by the CFPB to apply a one-size-fits-all approach in the area of overdraft would be wholly misguided.