Lynn Woosley is a Senior Director with Treliant. She is a seasoned executive with extensive risk management experience in regulatory compliance, consumer and commercial credit risk, credit and compliance risk modeling, model governance, regulatory change management, acquisition due diligence, and operational risk in both financial services and regulatory environments.
- Source: Consumerfinance.gov
Treliant knows compliance. If your financial services institution needs assistance with managing deposit-related compliance and consumer protection risks, we can help.
During examinations, the Consumer Financial Protection Bureau (CFPB) found overdraft disclosure and opt-in practices that were in violation of the Truth in Savings Act (TISA) and Regulation DD, EFTA and Regulation E, and the Consumer Financial Protection Act (CFPA) prohibitions on unfair, deceptive, or abusive acts and practices (UDAAPs). Some of the violations identified included:
- Charging consumers overdraft fees for ATM and one-time debit card transactions without obtaining consumer opt-in;
- Providing opt-in confirmation notices that did not inform consumers of their right to revoke opt-in to coverage of ATM and one-time debit overdraft services;
- Failing to retain evidence of affirmative consent from consumers opting-in to overdraft coverage of ATM and one-time debt transactions;
- Providing overdraft opt-in notices that were not substantially equivalent to the Model Form A-9 disclosure;
- Disclosing to consumers available balances information that included discretionary overdraft coverage potentially available; and
- Failing to disclose overdraft fees occurred on periodic statements.
As a result of these violations, the CFPB required remediation of harmed consumers. In addition, at least one Matter Requiring Attention (MRA) was issued by the CFPB. Treliant notes that the FDIC’s 2019 Consumer Compliance Supervisory Highlights identified other issues related to overdrafts, including inadequate consumer disclosures and conflicts between disclosures and debit processing practices. Depository institutions should examine their overdraft and transaction processing practices to ensure processing are consistent with regulatory requirements and account terms and conditions.