Will Bank Overdraft Fees Spread Again? Consumer Agency Is Reviewing the Rule

The bureau published a notice in the Federal Register and is seeking public comments by July 1.

It’s unclear whether the bureau would support changing or eliminating the overdraft rule. In an emailed statement, the bureau said that during the review, it must seek information to see whether it could “minimize the economic impact of the rule on small businesses” while achieving the rule’s objectives. The bureau expects to complete the review by November, after which it will announce its results and whether it plans to propose any changes “in light of what it learned.”

“It would definitely be a bad thing to roll back what minimal protection is in place already,” said Nick Bourke, director of consumer finance at the Pew Charitable Trusts, which has studied the impact of overdraft fees. “It’s definitely still necessary,” he said of the overdraft rule.

Chi Chi Wu, a lawyer with the National Consumer Law Center, said she would prefer to see overdrafts barred for all debit card and A.T.M. transactions. And fees charged, she said, should be “reasonable and proportional” to the amount overspent.

Pew’s research found that even with the “opt in” rule, many people didn’t know they could limit fees by declining coverage — perhaps because the form that banks use to explain their policies to customers is confusing.

The consumer bureau tested new forms for banks to use, but the status of that effort is uncertain.

Viveca Ware, group executive vice president for regulatory policy at the Independent Community Bankers of America, a group representing small and midsize banks, said the association was soliciting opinions from its members before submitting comments on the rule’s review.

One significant change over the past decade, she noted, is the growth in digital banking and smartphones, which allow consumers to easily check their bank balances to see if they have enough money to cover a purchase.

“We want a regulatory environment,” Ms. Ware said, “that does not impede our members’ ability to offer a variety of overdraft services.”

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