US will take no immediate action on banks' overdraft fees

2013-03-03T00:00:00Z US will take no immediate action on banks' overdraft feesBloomberg News Bloomberg News Arizona Daily Star
March 03, 2013 12:00 am  • 

WASHINGTON - The Consumer Financial Protection Bureau, which last year began exploring whether to tighten rules on checking overdraft fees, has decided against quick action after hearing from smaller U.S. banks that rely on the revenue.

The bureau announced a year ago it was collecting data on overdraft practices and would complete the inquiry by the end of 2012.

But now, the consumer bureau's director, Richard Cordray, said no decisions have been made about possible new rules. He said that "over the next couple of years" the agency will continue to work on the matter.

"If and when we act on this issue there will be plenty of advance discussion," Cordray told credit unions during a February conference call. He noted on the call that the bureau "got an earful from a number of you and many others on the issue of overdraft."

Camden Fine, president of the Independent Community Bankers of America, said revenue from overdraft fees represents 3 percent to 15 percent of total income for institutions in his association.

Fine said he has pointed out to Cordray that some smaller banks depend "in substantial degree" on the fees, much more so than large financial firms.

In 2011, bank customers paid $31.6 billion in overdraft fees, down from $33.1 billion in 2010, according to Moebs Services research firm.

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