On Tuesday, it published guidance to help law enforcement officials stop banks from charging overdraft fees based on so-called “phantom acceptance” agreements. These types of agreements arise when banks say they have a customer’s consent to charge the fees, without any actual proof that they have obtained it. Financial companies that imposing ATM overdraft fees and one-time debit card transactions without proof of consent could violate the law, specifically the Electronic Funds Transfer Act, the guidance said.
“He Consumer Financial Protection Bureau (CFPB) “The CFPB has found instances where banks have no evidence that they obtained consent for the overdraft,” CFPB Director Rohit Chopra said in a statement. “No American should be affected by bank account fees that they never accepted.”
The United States has been trying to reduce what President Joe Biden has called “exorbitant” overdraft fees and introduced a regulation earlier this year aimed at limiting the charges. The CFPB anticipates that the rules, which would effectively eliminate the average $35 fee that customers currently pay for overdrawing their bank accounts, should go into effect in October 2025 pending approval.
The CFPB said Tuesday that consumer protection law enforcers should assume consumers have not opted into overdraft unless banks prove otherwise. Some banks have failed to provide such evidence before charging consumers fees for ATM overdraft loans and one-time debit transactions, the CFPB said.
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