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We held a live session on October 16th to talk about the new requirements for remittance transfer providers.
The rule to implement the consumer protections created by the Dodd-Frank Act for certain electronic transfers of funds to other countries – the remittance rule – will go into effect on February 7, 2013.
You can read CFPB Director Richard Cordray’s full remarks and see the remittance rule presentation slides from the event.
If you missed the event, you can watch below:
As a result of today’s order, Discover will pay approximately $200 million in restitution to more than 3.5 million consumers.
Anyone affected by this order will automatically receive a credit to their account, or, if they’re no longer a Discover customer, they’ll receive a check in the mail or have any outstanding balance reduced by the amount of the refund.
If you have questions about whether you are entitled to a refund, please contact Discover.
As with any time large numbers of consumers get refunds, scammers sometimes pop up. Watch out for anyone who tries to charge you, tries to get you to disclose your personal information, or asks you to cash a check and send a portion to a third party in order to “claim your refund.” It’s a scam. Call us at (855) 411-CFPB.
Choosing your first bank account is an important decision. Unlike that first school ID photo, your first banking relationship could last long after you graduate. Making a smart decision now will mean fewer surprise fees that can add up later.
1. Choose an account as soon as possible. You should try to find an account before you start school. Don’t feel limited to only the banks or credit unions that have ATMs on or near campus; some will automatically reimburse fees for using any ATM. Consider accounts that offer services like remote check deposits, mobile apps, and online bill-pay. Signing up for a bank account now can save you headaches later, and researching accounts with the lowest fees can save you money.
2. Avoid paying unexpected fees. Dig deeper when accounts are marketed as “free” or “easy” – very few accounts charge no fees at all. Does your bank charge monthly fees? Many require minimum balances or regular direct deposit to avoid monthly fees. What about out-of-network ATM fees, overdraft fees, fees to use your debit card, and fees for services like online bill-pay? Knowing if and when fees will be charged could save you hundreds of dollars in fees each year. While half of young Americans never overdraft, the other half average approximately seven overdrafts a year. Overdrafts can cost more than $30 each, so that’s potentially a lot of money taken out of your pocket.
3. Sign up for direct deposit as soon as possible. Once you have a bank account, sign up for direct deposit with your school before classes start. If you are expecting money from your financial aid office, you’ll often get it faster this way – it can be weeks before the school gets to writing you a paper check.
You have many bank accounts options. Here are are three possibilities and key factors to compare when making your decision.
| Virtual checking accounts | Student checking account | School-affiliated banking services | |
|---|---|---|---|
How it works |
Some financial institutions provide exclusively online banking services that are comparable to a traditional checking account | Some banks and credit unions offer student checking accounts with discounted fees to establish long term relationships with new customers | Many colleges have a bank they partner with to offer students campus affiliated checking accounts or prepaid debit cards |
Benefits |
May waive or reimburse ATM fees, even those for out-of-network ATMS
Often include online banking and bill-pay Often have mobile apps for things like remote check deposit Often won’t let you overdraft your account |
Free access to in-network ATMs
May include online banking and bill-pay Access to traditional in-person bank branches |
On-campus branch locations and ATMs
May include online banking and bill-pay May offer discounts at local or campus businesses Sometimes your student ID card can be used to access your money |
Risks |
Generally do not have in-person customer service options |
Possibly charge monthly maintenance fees – up to $12 a month in some cases – if you don’t meet the minimum balance or the bank’s other enrollment criteria, like maintaining a full-time enrollment status at school
May charge more than $30 per overdraft, which can add up quickly, especially if you opt in to coverage for ATM and debit card overdrafts |
Could charge fees every time you use your debit card
Don’t always provide the ability to write checks May charge inactivity fees each month for not using your account frequently Possibly charge monthly maintenance fees – up to $12 a month in some cases – if you don’t meet the minimum balance or the bank’s other enrollment criteria, like maintaining a full-time enrollment status at school May charge more than $30 per overdraft, which can add up quickly especially if you opt in to coverage for ATM and debit card overdrafts |
When you spend more money than you have in your account, your bank will likely charge you an overdraft fee. So a $4 cup of coffee can end up costing you $35 or more. You can be charged several overdraft fees in a single day and even more in extended overdraft charges if your account remains overdrawn for a few days, so be careful – these fees add up quickly.
To avoid paying overdraft fees, monitor your accounts carefully and consider:
After your school takes out the cost of tuition, fees, and any on-campus living expenses from your total financial aid award, there is often money left for you to use for other expenses, like books. You normally have several options for how you get that money, including direct deposit to a bank account, to a card that might also double as your student ID, by check, or cash.
We recently published an advisory to consumers about financial aid disbursements, and we encourage you to choose your disbursement option wisely. They all have benefits and risks, so the most important thing is that you understand your needs and what potential fees you will be charged to use each option.
| Direct deposit to personal account | Paper check | Financial aid disbursement account | |
|---|---|---|---|
How it works |
Once you choose the best bank account for you, share that information with your school, and they will deposit additional aid funds directly to that account | Schools generally must offer a paper check or cash option no later than 14 days after the funds are available | A school may partner with a bank or another third party to handle financial aid disbursements
The most common option is a debit card attached to bank account that has your financial aid deposited in it You are not required to use the bank chosen by your school |
Benefits |
You can pick an account that offers what you need and charges few or no fees
You can access the disbursement quickly with direct deposit |
You can deposit your money into the account of your choice and do not need to provide additional personal financial information | Often the quickest way to access to your disbursement if you haven’t already provided your school with direct deposit info |
Risks |
No significant risks |
If you use a check casher, they may charge as much as 4% of the check amount
You may not be able to access your funds immediately after making a deposit |
The school makes the agreement with the bank, not you
You won’t be able to shop for a low-cost product, and these cards and accounts may come with fees you could avoid by shopping |
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If you’re having trouble paying your mortgage, we can help you get connected to a HUD-approved housing counselor at no cost to you. The counselor can help you work with your servicer or lender to try to avoid foreclosure, organize your finances, understand your mortgage options, and find a solution that works for you.
Mortgage loan modification scams are designed to take your money by making a false promise of saving you from foreclosure. Scammers may:
Companies that offer mortgage relief services aren’t allowed to collect any fees until they give you a written offer from your servicer or lender that you decide is acceptable. A mortgage relief company must also tell you that:
File a complaint online or call us at (855) 411-CFPB (2372) from 8 a.m. – 8 p.m. ET, Monday-Friday.
Share this with #ForeclosureHelpIsFree
It can be hard for people to talk about finances, especially if they’re in trouble. Even if you’re not facing foreclosure yourself, please share a link to this advice with your networks using the hashtag #ForeclosureHelpisFree. You’ll never know who you might be able to help.
The Consumer Financial Protection Bureau (CFPB) has determined that Capital One marketed certain “add-ons” – fee-based services added to credit card accounts – in a way that violated federal law. As a result of enforcement action by the CFPB, Capital One agreed to automatically refund $140 million to 2 million Capital One customers.
Capital One customers: If you’re eligible for a refund and you have an open account, the refund will be automatically credited to your account. If you’re eligible but no longer have an account with Capital One, a check will be mailed to you. You should expect to receive your refund later this year. You don’t need to take any action to get your refund.
If you have questions about whether you are entitled to a refund, please contact Capital One.
Watch out for scammers claiming that they will get you a refund: When large numbers of consumers get refunds, scammers sometimes pop up. The scammer may charge you a fee or try to steal your personal information. If someone tries to charge you, tries to get you to disclose your personal information, or asks you to cash a check and send a portion to a third party in order to “claim your refund,” it’s a scam. Call us at (855) 411-CFPB.
For the first time, consumer reporting agencies will be subject to a federal supervision program. Earlier today, we held a field hearing today in Detroit for the announcement with remarks from Richard Cordray, CFPB Director, as well as testimony from consumer groups, academics, industry representatives, and members of the public. Director Cordray said:
[The credit reporting] system must merit our trust and confidence for the credit markets to be perceived as fair. We all share in this responsibility. But the credit reporting market is not one where consumers can shop around among different providers, for people have no choice about whether to have any of the credit reporting companies keep track of their credit history. That is why the Consumer Bureau’s new authority is so important, and why it must be exercised carefully and effectively.
Archived footage is available below. You can also read Director Cordray’s full remarks right now.
See the rule that establishes our consumer reporting supervision authority.
Read a consumer advisory on checking your credit score.
Find a credit reporting company that specializes in a particular area like medical history, employment history, etc.
Tell us your story about credit reporting.
Tweeting about the event our our announcement? Use #CreditReporting.
