Smaller Banks Charging High Fees Untouched by Overdraft Proposal

The Consumer Financial Protection Bureau’s proposal to restrict overdraft fees has the potential to take a big bite out of banks’ fee income, but smaller banks that rely heavily on overdraft are likely to remain unscathed.

Banks and credit unions with $10 billion or more in assets would be subject to overdraft fee caps—set by the CFPB or by the lenders themselves based on the costs of covering overdrafts—under the proposal released Wednesday. Overdraft fees that go beyond those proscribed limits would be subject to the Truth in Lending Act, meaning banks and credit unions would have to disclose interest ...