WASHINGTON (Legal Newsline) — The Consumer Financial Protection Bureau (CFPB) announced Aug. 4 that it has unveiled its new Know Before You Owe overdraft disclosure prototypes, which were created to improve the model form that banks and credit unions already provide to consumers weighing overdraft coverage.

According to a new CFPB study, consumers who often attempt to overdraw money from checking accounts can pay as much as $450 in fees because of having opted in to debit card and ATM overdraft coverage. Many of these consumers, as the study shows, are financially vulnerable, often having lower daily balances and lower credit scores. 

The CFPB is currently testing four prototypes with simple designs to help consumers better understand the risks of opting in to overdraft coverage.

"Our study shows that financially vulnerable consumers who opt in to overdraft risk incurring a rash of fees when using their debit card or an ATM," CFPB Director Richard Cordray said. "Our new Know Before You Owe overdraft disclosure prototypes are designed to help consumers better understand the consequences of the opt-in decision."

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Organizations in this Story

Consumer Financial Protection Bureau
1700 G St NW
Washington, DC - 20552

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