The report defines “reliance” as “the share of overdraft and NSF fees among the listed fees” at a given institution. Variance in “reliance” can occur because of several things, including: • Different fee structures in use by various institutions • The mix of consumers served • Combination of consumer fees (primarily checking account) and non-transaction accounts (savings and money market deposits) CFPB weighs in on Data Point results When the Data Point was released, prepared remarks from the Director of the CFPB, Rohit Chopra, were critical of the report’s findings. “The reports show banks, including big banks, continue to rely on these fees as a major source of revenue. Rather than competing on transparent, upfront pricing, large financial institutions are still hooked on exploitative junk fees that can quickly drain a family’s bank account.” According to its leadership, the CFPB is planning to “take action against large financial institutions whose overdraft practices violate the law” which is their purpose and function. The CFPB report shows that consumers consistently use overdraft services and that usage is generally stable. Unfortunately, many CFPBsupervised financial institutions do not provide a disclosed overdraft solution with limits and transparent policies. The CFPB study does not include financial institutions that utilize JMFA’s fully disclosed solution. Instead, the CFPB refers to “exploitative junk fees” but does not give financial institutions direction, or support transparent, consumerfocused overdraft solutions. Focus on consumer protection remains strong A well-disclosed overdraft solution that complies with banking laws and regulations is an important banking strategy and highly valued by account holders. With the continued focus on transparency, it’s a responsible business practice to have simplified and effective communication with your account holders. Reviewing and evaluating your program’s communication impact is the best way to alleviate any confusion about how your program works and the fees associated with its use. And, with an experienced overdraft program provider, you’ll be able to navigate the complexities of the regulatory environment and mitigate any potential compliance issues. To learn more, please contact your local JMFA representative or call at (800) 809-2307. January • February 2022 13
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