A controversial new federal agency is targeting a consumer pariah: checking
account overdraft fees. The de facto head of the Consumer Financial Protection
Bureau, Raj Date, said in a speech in Philadelphia in mid-September that the new
regulator is going to begin scrutinizing overdraft programs with the goal of
clarifying the cost of free checking accounts. "With these free checking
accounts, much of the costs to the consumer were buried in overdraft fees," said
Date, special adviser to the Treasury Secretary on the consumer bureau. "Going
forward, the bureau will carefully assess how we can best ensure that the
overall market for short-term credit is fair, transparent, and competitive."
Date -- who is running the consumer bureau as it anticipates the confirmation of
its first chairman -- said that one of the CFPB's first major decisions could be
establishing guidelines for banks to make sure consumers understand what they
are doing when they accumulate overdraft fees.