Although bankers are pushing back (paid subscription required) on the proposal of the OCC, FRB and FDIC to require banks to break out overdraft fee income on their quarterly CALL reports, the effort is unlikely to stem the continuing crackdown on overdraft fees. That crackdown is not only handwriting on the wall, it's handwriting spray painted in huge block letters on every wall in sight.
Regulators claim that they're primarily concerned about the dependency of individual banks on a source of income "at at a time when stricter regulations appear to be putting pressure on fee-related revenue." Sure they are. There's more to it than that.
They also cited "other public purposes" for wanting the more detailed data, saying the changes "would significantly enhance the ability of the agencies and the [Consumer Financial Protection] Bureau to monitor consumers' behavior."
"Greater understanding of trends in overdraft fees and other deposit service charges is necessary to assess institutional health and enhance understanding of the costs and potential risks financial services pose to consumers," the agencies said.
The latter concern is what consumer advocacy groups are focused on.
"I don't see why the information shouldn't be used by regulators for any of their supervision duties, and consumer protection is related to safety and soundness," said Lauren Saunders, managing attorney with the National Consumer Law Center. "The information is clearly important for regulators to know and banks that are not abusing overdraft fees should have nothing to hide."
You'll notice the use of the term "abusing." That's a favorite term of the CFPB, which always knows what's abusive, even when the consumer does not, and even when the consumer thinks he or she knows exactly what he or she is doing, and even when the consumer would rather have the government not restrict his or her access to overdrafts.
While the regulators may be paying lip service to the issue being all about "safety and soundness," on the theory that what's bad for a subset of consumers (those who "overuse" or are "overserved" overdrafts) is always bad for bank safety and soundness, the actual agenda is the eventual restriction of the ability of banks to charge overdraft fees. That will likely result in severe restriction of ability of the bank customers who rely on the ability to make overdrafts to make ends meet paycheck-to-paycheck, to actually be able to obtain an overdraft (as opposed to having their checks bounce).
Some large banks have been hammered for their overdraft practices, and rightly so. On the other hand, you hate to see babies thrown out with the bathwater, especially when those babies' parents will be turning to alternatives like pawn shops, payday lenders, and a guy named Vito.