CFPB Wants to Help Consumers Understand Overdraft Fees

CFPB Wants to Help Consumers Understand Overdraft Fees

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In yet another attempt to inform the public, the Consumer Financial Protection Bureau is looking for opinions on new designs for overdraft disclosure forms. A part of their 'Know Before You Owe' program, the redesigns are an attempt to make it easier for bank applicants to know what they're signing up for. 

The latest announcement reads, "We're introducing four potential designs for an overdraft opt-in model form. We designed these forms to make it easier for people to understand what it means when they opt in for debit card and ATM overdraft on checking accounts. We're giving you an opportunity to see the progress we've made and tell us what you think." 

For a crash course; an overdraft is a small line of credit that your bank lends out if you withdraw/purchase from an account with a zero dollar balance. The set amount of overdraft allowed, as well as the actual overdraft fees, are determined by the individual bank and are always opt-in, (meaning if you didn't sign up for it, you won't be able to overdraft).

Usually the overdraft needs to be paid back in a certain amount of time otherwise it will hurt your credit score, and overdraft fees can be fairly high depending on what bank/ credit institution you use. 

As in all things CFPB, they're taking this time to ensure that customers who opt-in to these services are fully aware of what they're signing up for. So they're asking consumers directly for feedback. You can take a look at the designs and email some feedback here

 

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