CRL in the News

Overdraft services are essential for some credit union members, trade groups said, asking the CFPB not to take any additional action to restrict them.

NEW YORK, July 2 (Reuters) - The attorneys general of New York and 23 other states plus Washington, D.C. have urged the Trump administration not to roll back a decade-old federal rule that limits the ability of banks to charge overdraft fees when customers spend more than they have in their accounts. In a letter to Kathy Kraninger, director of the Consumer Financial Protection Bureau (CFPB), that was made public on Tuesday, the attorneys general, all Democrats, called the rule an “overwhelming success” that should not be watered down or scrapped.

WASHINGTON– A coalition of consumer groups has sent a letter to the CFPB urging it not to weaken the Federal Reserve’s 2009 overdraft “opt-in” rule. “More broadly, comprehensive reform of unfair and abusive overdraft practices is badly needed. … Financial institutions combine a number of unfair and abusive practices in order to impose high, repeat overdraft fees on their customers,” the letter reads.

The Consumer Financial Protection Bureau just wrapped up a public comment period on a rule that extends some protections to consumers who overdraw their checking accounts. The CFPB must examine the rule under a federal law that requires agencies to review rules that might affect small businesses. Before the Federal Reserve Board set the 2009 overdraft rule, banks could automatically enroll people in overdraft protection and slap them with a fee — typically around $35 per transaction. With the rule in place, people can choose to have banks reject purchases at the point of sale instead to avoid

Kyra Bowerman was trapped in a vicious banking cycle. The Indianapolis teacher and single mom of two would open a bank account. An expensive day care bill would come due at the same time she needed to pay for rent, utilities and food. The bank would charge an overdraft fee. The account would close.

Yesterday, a unanimous panel of the U.S. Court of Appeals for the Seventh Circuit issued an opinion in which it concluded that the federal Higher Education Act (HEA) does not preempt state law claims against student loan servicers. The case involves a student loan borrower who brought a putative class action against the loan servicer alleging violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, and constructive fraud and negligent misrepresentation under Illinois common law. The district court granted the defendant’s motion to dismiss concluding that these state law

The student debt crisis is reaching a breaking point — and many grads are regretting their pricey degrees. A new study from the FINRA Foundation found that almost half of Americans with student loans wish they’d chosen a less expensive college, compared to only 9% among those who did not graduate with debt.

LUDINGTON—Four years ago, Merenda Vincent was desperate for cash. She had an overdue car payment, along with a medical bill she couldn’t pay. Living on a monthly Social Security check of less than $1,000, she had no money in the bank. Vincent recalled that she walked into a payday lending store called Check ‘n Go outside Ludington, a small Lake Michigan community north of Muskegon. She said she wrote a post-dated check to Check ‘n Go and came out with $100 in cash. A month later, she still could not meet her debt. So she took out another loan. And then another.

Often it’s the smallest charge that triggers the biggest fee. Overdraft fees, which is what banks charge when transactions including debit card purchases cause your account to drop below zero, average $35 — nearly twice the size of the average $20 debit card transaction, according to the Center for Responsible Lending. Altogether, customers of larger banks paid more than $11 billion for bounced checks and other overdrafts in 2017, according to the most recent data from the Center for Responsible Lending. That does not include the fees collected by small community banks or credit unions, which

Startups that provide early access to workers’ earned wages are jostling over key aspects of pending California legislation that would create the nation’s first-ever regulatory framework for the nascent industry. The state Senate passed a bill 35-0 last month, but interviews with executives in the fast-growing sector revealed big disagreements about the legislation. Those disputes reflect key differences in their firms’ business models. The proposed rules stand to help the companies, broadly speaking, by making clear that their products are not loans. The firms charge fees for access to income