The Consumer Financial Protection Bureau, also known as CFPB, has successfully returned over $21 billion to consumers since its inception over ten years ago. This amount includes significant refunds and penalties imposed on banks for engaging in harmful practices, such as unauthorized fund transfers and excessive overdraft fees. However, with new leadership at the helm of the agency, its role as a consumer advocate may be in jeopardy.
Earlier this year, the CFPB faced turmoil when reports emerged of directives to halt investigations, cease enforcement actions, and even suspend operations. Additionally, the agency has recently dropped several high-profile lawsuits.
In the absence of strong consumer protection measures, it is crucial for individuals to take proactive steps to safeguard their bank accounts and finances. Here are four strategies to help you protect your money:
1. Familiarize Yourself with Your Bank’s Policies
To identify unauthorized charges and suspicious transactions, it is essential to understand the terms and conditions of your bank account. Erin Bryan, a partner at Dorsey & Whitney law firm, advises individuals to be aware of their own responsibilities as well as the bank’s obligations.
By being informed about minimum balance requirements, fee schedules, and account restrictions, such as limits on online withdrawals, you can prevent unpleasant surprises. Bryan suggests reaching out to your bank for clarification on any unclear terms and resolving issues promptly.
2. Monitor Your Savings Rate
Many banks have been criticized by the CFPB for providing misleading information about savings rates. To ensure you are earning the expected interest on your savings, regularly check your annual percentage yield (APY) and verify the accuracy of interest payments deposited in your account.
As interest rates can fluctuate, consider setting reminders to review your rates after key economic events, such as Federal Reserve meetings. If your current savings rate is below the national average, explore other options to maximize your savings potential.
3. Manage Overdraft Fees Wisely
Overdraft fees can be costly, but you can take steps to avoid them. Decide whether you want overdraft protection or prefer to opt out, potentially leading to declined transactions but avoiding fees. Alternatively, establish a backup account for low-cost overdraft transfers.
If you opt for overdraft protection, monitor your account closely and set up alerts for low balances to prevent overdrafts. Familiarize yourself with your bank’s overdraft policies and request fee waivers for occasional mistakes.
4. Utilize Available Consumer Protection Resources
While the CFPB’s effectiveness may be waning, individuals can seek assistance from other resources:
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Office of the Comptroller of the Currency: Assists consumers in resolving issues with national banks and major financial institutions.
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National Credit Union Administration: Provides deposit insurance for credit union customers and offers a platform for filing complaints.
In challenging situations, consider reaching out to your state attorney general’s office or seeking legal assistance from organizations offering affordable services. By taking control of your financial well-being and staying informed, you can protect yourself in an environment where consumer advocacy may be diminishing.