02/22/2012 - The newly formed consumer-financial federal watchdog has in its sights a long-time concern of advocates: the overdraft charge.
If history is a gauge, this could be a tense battle, as banks have long used overdraft charges as a big profit center and have argued consumers want what banks call protection.
One likely step the CFPB will take is to increase its push for simplified disclosure documents from the banks. The CFPB has already echoed the call from the Pew Institute that banks to adopt a standardized, one-page disclosure of fees on checking accounts.
Pew, a group that advocates public policy, had said a study showed the median size for banks’ disclosure of fees was 111 pages. The argument is the simplified disclosure would help consumers see how to avoid fees.
J.P. Morgan Chase, the nation’s biggest bank by assets, already said it would adopt Pew’s guidelines, though even its boiled-down disclosure takes three pages.
More may very well follow suit and change disclosures, but more attempts from regulators to curb the revenue source could create another battleground for banks.
Read the full article, More Scrutiny For Overdraft Fees Will Be Tense, on the Wall Street Journal's Web site.