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The US Consumer Financial Protection Bureau cautioned banks against extracting overdraft fees from customers without first obtaining their consent. It published guidance Tuesday to help enforcers stop banks from charging overdraft fees based on so-called "phantom opt-in" agreements. Such agreements arise when banks say they have customer consent to charge the fees, without any actual proof they got it.
Financial firms that levy overdraft fees for ATM and one-time debit card transactions without proof of consent could be in violation of the law, specifically the Electronic Fund Transfer Act, as per the guidance. “The CFPB has found instances where banks have no evidence that they obtained consent for overdraft,” CFPB Director Rohit Chopra said in a statement. “No Americans should be hit with bank account fees that they never agreed to.
” The US has been trying to slash what President Joe Biden has called “exorbitant” overdraft fees and introduced regulation earlier this year aimed at capping the charges. The CFPB anticipates that the rules — that would effectively eliminate the average $35 charge customers currently pay for overdrawing their bank accounts — should take effect in October 2025 pending approval. The CFPB said Tuesday that consumer protection law enforcers should assume consumers have not opted into overdraft unless the banks prove otherwise.
Some banks haven’t been able to supply such evidence before they charged consumers fees for overdraft loans for ATM and one-time debit transactions, the CFPB said. Stock Trading Market 101: An Insight into Trendlines and Momentum By - Rohit Srivastava, Founder View Program Stock Trading Markets 102: Mastering Sentiment Indicators for Swing and Positional Trading By - Rohit Srivastava, Founder View Program Stock Trading Market 103: Mastering Trends with RMI and Techno-Funda Insights By - Rohit Srivastava, Founder View Program Stock Trading Market 104: Options Trading: Kickstart Your F&O Adventure By - Saketh R, Founder- QuickAlpha, Full Time Options Trader View Program Stock Trading Introduction to Technical Analysis & Candlestick Theory By - Dinesh Nagpal, Full Time Trader, Ichimoku & Trading Psychology Expert View Program Stock Trading Options Scalping Made Easy By - Sivakumar Jayachandran, Ace Scalper View Program Stock Trading Futures Trading Made Easy: Future & Options Trading Course By - Anirudh Saraf, Founder- Saraf A & Associates, Chartered Accountant View Program Stock Trading Options Trading Made Easy: Options Trading Course By - Anirudh Saraf, Founder- Saraf A & Associates, Chartered Accountant View Program (You can now subscribe to our ETMarkets WhatsApp channel ).
