The Consumer Financial Protection Bureau (CFPB) is taking steps to improve checking account access amidst Bureau concerns that consumers are being sidelined by the lack of account options and by inaccurate information used to screen potential customers.
CFPB Director Cordray stated: "Today, for a wide variety of reasons, there are nearly 10 million unbanked households that have no checking or savings account."
To address the issue of checking account access, the CFPB sent a letter to the 25 largest retail banks encouraging them to make available and widely market lower-risk deposit accounts that help consumers avoid overdrafts and fees. The CFPB is also urging banks and credit unions to offer consumers accounts that do not authorize them to spend money they don’t have and to prominently advertise the availability of these accounts.
The CFPB notes that these lower-risk accounts may include prepaid cards, as well as no overdraft checking accounts.
In addition, the CFPB issued a bulletin warning banks and credit unions that failure to meet accuracy obligations when they report negative account histories to credit reporting companies could result in enforcement actions.
Finally, the CFPB is providing consumers with resources to help navigate the deposit account system.
Read press release.
Read CFPB Director Cordray's Prepared Remarks.
More proof that CFPB is "big brother."
ReplyDeleteFrom the press release, "And while some banks and credit unions currently offer products that help consumers avoid overdrafts and other risks, the CFPB is also encouraging the industry more broadly to provide account options for consumers so they are less likely to overspend their funds."
Since when is it the duty of banks and credit unions to play parent to consumers who cannot realize that if they have $100 to spend, they can only spend $100? Too many consumers have the belief (updated for 2016) "If I have a debit card, how can I be out of money?"
Do these account options also require financial institutions not to charge when the consumer tries to spend more money than he/she has on deposit and available?