Commentary: CFPB Study of Overdraft Programs
G. Michael Flores
Bretton Woods, Inc.
Todd J. Zywicki
George Mason University - Antonin Scalia Law School, Faculty; PERC - Property and Environment Research Center
November 4, 2013
George Mason Law & Economics Research Paper No. 13-60
The Consumer Financial Protection Bureau (CFPB) released its initial analysis of bank overdraft programs in a June 2013 white paper. We review the report and provide commentary on its methodology, its preliminary conclusions, and gaps in its analysis. We provide a synopsis of findings from previous third-party analyses to lay the foundation for our response, and then we follow the paper’s organizational structure as we discuss specific points it makes. We also identify the larger policy questions of access to credit, alternative sources of credit, and the economic benefit attained by the use of overdrafts. These questions must be addressed before the bureau can make any findings of consumer harm that would justify new regulation and the resultant unintended consequences of limiting options to the consumers the CFPB is structured to protect.
Number of Pages in PDF File: 24
Keywords: consumer credit, overdrafts, alternative financial services, consumer protection, government policy and regulation
JEL Classification: D14, D18, G21, G28
Date posted: November 6, 2013