February 23, 2012

Cordray also said the agency will look into whether banks should be required to process transactions chronologically. Many banks process them by dollar amount from highest to lowest, which Cordray said allows for the imposition of multiple overdraft fees per day. Banks have argued that doing this ensures that consumers' most important transactions, such as mortgage or credit card payments, get processed first.

The CFPB said it will begin the inquiry process by seeking feedback from bank customers, consumer groups and banks themselves. Cordray said the agency will also exhaustively examine data while forming its inquiry. "We are committed to being a data-driven agency," he said.

Cordray said the study could result in additional regulatory rules, and possibly lawsuits.

When the roundtable participants were allowed to speak, the tenor was fairly predictable. The representatives from consumer groups cast banks as villains, freely using words such as "gouging" and "misleading" to describe their methods. Representatives from the banks, which included Bank of America, Citi, Amalgamated Bank and Teachers Federal Credit Union, attempted to explain how they are trying to mitigate overdraft fees and better educate consumers.

Ultimately, it is an interesting issue with valid points on both sides. What do you think? Does this CFPB inquiry seem like a step in the right direction, or just a pointless government excercise?

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as ...