The Cities for Financial Empowerment Fund, a nonprofit that seeks to improve financial stability of low- and moderate-income households, validated the account under its Bank On initiative.
More banks are discussing the status of overdraft practices, and the industry is bracing for the potential of new regulations under President-elect Joe Biden.
The bank disclosed in a regulatory filing that it is in the process of responding to a civil subpoena from the Consumer Financial Protection Bureau. It is the latest bank to come under regulatory scrutiny for the fees charged to consumers who overdraw their accounts.
Deposits have piled up, curtailing overdrafts and other fees. The trend could force lenders to find other ways to make money — or start cutting to the bone.
The fees have helped banks recoup costs of free or low-cost checking accounts for decades, but they can penalize low-income customers and drive them away from banking. Is there a better way?
