Debt Collectors in Your DMs?
Plus, Consumer Banking News
Who is that sliding into your DMs? It could be a debt collector, thanks to a rule implemented by the Consumer Financial Protection Bureau (CFPB) that went into effect this month. The rule was codified during the tenure of Trump Administration CFPB Director Kathy Kraninger.
Under the new rules, debt collectors who contact you on social media have to identify themselves as debt collectors but can attempt to join your network by sending you a friend request. Collectors must give you the option to opt out of being contacted online, and any messages they send have to be private — collectors can’t post on your page if it can be seen by your contacts or the public.
Avery Evans via Unsplash
Will Overdraft Fees Soon Be Over?
A series of stories last week indicate that key regulators are taking a hard look at overdraft fees with an eye toward ending them. Couple that with Capital One announcing it is ending all overdraft fees, and this could be the beginning of the end of a practice that is harmful to consumers.
Advocates at the National Consumer Law Center (NCLC) today applauded an announcement by Capital One that the bank will eliminate overdraft fees. NCLC further issued a call for other banks to follow suit and called on the Consumer Financial Protection Bureau (CFPB) to issue rules that would end overdraft fees.
“Capital One’s complete elimination of all overdraft and NSF fees is a game changer that should set the standard for the entire banking industry and encourage the CFPB to stop overdraft fees from being used as a high-cost form of credit that can reach or exceed the cost of triple-digit payday loans,” said Lauren Saunders, associate director of the National Consumer Law Center. “Capital One is the first top-10 bank, the first with a real branch network, and the first with significant overdraft revenue to make the hard choice to eliminate overdraft and NSF fees that harm the most vulnerable consumers and push them out of the banking system.”
In addition to the move by Capital One and the push by consumer advocacy groups, there’s now federal legislation that would extend key protections to prevent the worst abuses of overdraft fees.
Now, Rep. Carolyn Maloney of New York has introduced the Overdraft Protection Act to protect consumers from the most abusive of overdraft fee practices.
Citing research from the CFPB on the impact of fees on consumers, Maloney said:
“Today’s research underscores the profound harm overdraft fees inflict on U.S. consumers, and I welcome the CFPB’s enhanced scrutiny of banks in this area. These fees are predatory and an influential driver of racial inequity, taking billions of dollars out of the pockets of those Americans who can afford it the least. It’s not right for a $10 sandwich at a bodega to cost $50 due to overdraft charges. My Overdraft Protection Act would stop these abusive practices once and for all.”
Finally, some encouraging news on halting bank consolidation that could lead to monopolies:
Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra and FDIC Chair Martin Gruenberg yesterday issued a joint statement on the need for additional scrutiny of bank mergers. The effort is designed to prevent banking monopolies and the consolidation of banks that leads to “too big to fail” entities.