Commentary on CFPB Report: Data Point: Checking Account Overdraft

16 Pages Posted: 23 Sep 2014 Last revised: 16 Jul 2016

See all articles by G. Flores

G. Flores

Bretton Woods, Inc.

Todd J. Zywicki

George Mason University - Antonin Scalia Law School, Faculty; PERC - Property and Environment Research Center

Date Written: September 22, 2014

Abstract

The Consumer Financial Protection Bureau (CFPB) released a data point update of its ongoing analyses of overdrafts. We review the report and provide commentary on its findings, methodology and the inferences of this update, specifically the potential to further restrict debit card overdrafts. We suggest metrics the CFPB should use in its future analyses to help provide a more thorough assessment of the costs and benefits of overdrafts. To this end, we cite findings from our previous and other third-party analyses. Finally, we recap the larger policy questions of access to credit, alternative sources of credit, and the economic benefit attained by the use of overdrafts. We hope to add positive feedback to the CFPB as they work toward potential regulations of overdrafts. As with the CFPB’s prior efforts, this report provides no basis for additional regulation of bank overdraft protection. Further research, however, is warranted.

Keywords: consumer credit, overdrafts, alternative financial services, consumer protection, government policy and regulation

JEL Classification: D14, D18, G21, G28

Suggested Citation

Flores, G. and Zywicki, Todd J., Commentary on CFPB Report: Data Point: Checking Account Overdraft (September 22, 2014). George Mason Law & Economics Research Paper No. 14-45. Available at SSRN: https://ssrn.com/abstract=2499716 or http://dx.doi.org/10.2139/ssrn.2499716

G. Flores

Bretton Woods, Inc. ( email )

United States

Todd J. Zywicki (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States
703-993-8091 (Phone)
703-993-8088 (Fax)

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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