“Cordray encouraged financial institutions to offer lower-risk account options, including accounts that would not allow for overdrafting the account.” according to the Credit Union Times. They’re pressuring financial institutions to go to more of a prepaid option that does not overdraw the account. Basically, the payment does not get honored.
A few points were brought up that relate the short term loan industry:
- Overdraft does not create the most complaints so why is the CFPB attacking it? Cordray dodged the question.
- Can the CFPB use their discretion to smaller institutions? He said “No.”
- There is no timeline for the rules…..what’s new. I guess no news is good news.
