Dynamic Accident Lawyers: CFPB Investigates Credit Union Overdraft Fees

Fiserv Inc., a financial technology firm, has been informed by federal regulators that they must hand over data regarding credit union overdraft fees. This mandate is part of a larger, ongoing federal evaluation of credit unions’ overdraft fees.

Overdraft Fee Investigation

During a brief interview in the wake of the annual Fiserv shareholders meeting on May 20, the company’s CEO Jeff Yabuki stated that the CFPB (Consumer Financial Protection Bureau) has requested that Fiserv anonymously supply data on overdraft fees charged by U.S. credit unions that employ Fiserv’s financial technology. “What [the CFPB] trying to understand is what are the fees that are being charged and do they make sense,” according to Yabuki.

Overdrafts occur when a credit union, bank, or other financial institution covers the amount of a transaction when the consumer’s account has insufficient funds. An overdraft fee is the charge a credit union assesses for their overdraft service.

CFPB spokeswoman Moira Vahey states that the Federal Bureau has looked into overdraft fees and practices before, though targeting larger financial institutions. “This more recent information request will enable us to observe whether and how overdraft programs differ at different types of depository institutions, including small institutions and credit unions,” states Vahey. Although Fiserv has some rather large financial institutions as clients, the company also provides its technology to many credit unions.

Yabuki is concerned that a new federal regulation may be in the works. He states: “We [Fiserv] have absolutely no problem making sure that the fee structure makes sense, but what we worry about is that this kind of research could end up with a unilateral ‘We think this is bad,’ without understanding how these fees are appropriate.”

Credit unions have already remarked that having to comply with new federal and state rules that govern credit unions has made it too expensive for smaller financial institutions to stay in business without merging with larger companies.

In early May, Credit Union Times reported that besides Fiserv, FIS Global also received a CFPB request to turn over overdraft fee data.

Overdraft Fee Litigation

The recent interest in overdraft fees stems from the fact that some credit unions are overcharging members for overdraft services. The CFPB has taken action, and just a few months ago in April fined Regions Bank $7.5 million for allegedly charging illegal overdraft fees to their consumers’ accounts. Regions was also ordered by the Bureau to refund the overdraft fees to all affected Regions Bank consumers.

Attorneys are currently looking into the possibility of filing lawsuits or class action lawsuits against credit unions who impose illegal overdraft fees on their consumers or practice unfair overdraft practices. If you believe your credit union has charged you illegal overdraft fees, you should contact an attorney to see if you have a legal claim.

Join a Free Credit Union Overdraft Fee Class Action Lawsuit Investigation

If you have incurred overdraft fees from a credit union, you may be eligible to participate in a free class action lawsuit investigation.

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