WASHINGTON–The Office of the Comptroller of the Currency and the FDIC have joined in cautioning the nation’s banks on their overdraft practices.
The two federal regulators join the CFPB in saying overdraft fees are a reason for concern.
Specifically, the OCC and the FDIC said they will be focused on one practice specifically, so called "authorize positive, settle negative” transactions, which critics say can lead to overdraft charges against consumers even though their account balances were positive at the time of the transaction.
According to the two regulators, the practice borders on deception.
The OCC and FDIC both said the authorize positive/settle negative transactions potentially cause issues for consumers because of how complex of transaction settling can be for consumers, even if they have been informed of the practice by the financial institution.
In response, the OCC and FDIC have offered direction on how banks can keep their overdraft policies in compliance.
In addition to the warning over authorize positive/settle negative transactions, the OCC also pointed to three other types of overdraft fees it sees as potentially problematic: representment, periodic and unlimited.
As CUToday.info reported here, a class action lawsuit has just been filed against Harvard University Employees Credit Union over its overdraft fee practices that alleges HUECU authorized positive/settle negative transactions that led to overdraft fees against members.