It sometimes seems as there is nothing worse than all of those little fees we have to pay in order to maintain service. If you have cable/satellite TV, you probably know about the extra fees that seem to get more expensive every year. Heck, even buying concert tickets means that you have to pay “service” fees in order to just go out and enjoy some music. And forget about bank fees, right? If you have a checking or savings account, you probably know all too well how expensive those bank fees can get. It really seems to be a chore to have to pay money to the banks that you keep your money at, doesn’t it?
It seems that the outcry about bank fees has finally reached a fevered pitch, and that the government is taking the matter seriously. The Feds are reaching out in a campaign that they say is aimed at making it simpler for American consumers to get access to traditional checking accounts and to avoid paying stiff overdraft fees. Recently, the director at the Consumer Financial Protection Bureau (CFPB), a guy named Richard Cordray made a statement about actions his bureau is taking on this matter. The CFPB served notice to the 25 largest banks and told them that they had to make it easier for consumers to get checking accounts. Cordray also issued a warning to banks that they will need to report negative bank account activity with accuracy, or that his Bureau would get involved and start taking action.
Just as there are credit reporting bureaus that give you a score, there are special organizations that focus on bank account history data. For example, if you have ever bounced a check or allowed your bank account to dwindle to a negative level, and then allowed it to close down, these organizations have databases that record this activity. The banks check this information out, and if you have a troubled history with bank accounts, this reporting can prevent you from opening a new account. The CFPB believes that many people have been unjustly blacklisted by these databases, and that they don’t have the tools they need to appeal their cases.
Cordray said, “The qualification process can be confusing and opaque. Until they are rejected for a bank account, people often do not know that their prior account usage has been recorded and shared with other institutions.” When people are left out of the mainstream banking system, they have no choice but to pursue alternative financial products and services. According to Cordray, “People who want the benefits and convenience of some kind of deposit account deserve a fair opportunity to have one. We are concerned that some people are being inappropriately sidelined.”
The CFPB has gone on record as stating that financial service providers need to make it easier for people to avoid overdraft fees. These types of fees often have a snowball effect and force people out of the traditional banking system. The majority of big banks don’t seem interested in promoting their no-overdraft fees programs. The CFPB seems to be pressuring these banks to make these types of programs more visible to the general public.
The nation will have to wait and see if the CFPB is able to make traditional bank accounts more accessible and less expensive to the average American consumer. Considering that this bureau is doing all it can to make alternative financial products less readily available, they need to do what they can to make it possible for unbanked and underbanked consumers to get access to critical financial services as quickly as possible.
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