For those of us with high hopes that the CFPB would finally give consumers an even break against financial institutions employing “tricks & traps,” it is sad to see this new regulatory agency compromise itself by acting like a consumer activist -- joining the witch-hunt against payday advance companies whilst allowing financial institutions to continue overdraft
programs, conveniently hidden behind Reg DD, Truth in Savings, instead of regulated under Reg Z, Truth in Lending.

One might think that government-insured financial institutions would be required to extend depositors even greater protections than those required of non-bank lenders. But that presumption would be wrong.

Federal regulators continue to allow banks and credit unions to profit from a short-term credit product that deprives borrowers of the basic protections required of all other lenders, including informing consumers when credit is extended, how much credit is extended, and the cost of
that credit expressed as an annual percentage rate.

The CFPB is mandated to regulate similar products across the financial services industry regardless of provider. Proposing rules to dramatically increase consumer protections for payday advances and for prepaid cards with overdraft features without also proposing rules for bank/CU overdraft programs - that operate with no similar protections - demonstrates once more the Bureau's continuing lack of objectivity, evenhandedness and adherence to its charter.

Choking off access to legal, regulated, non-bank sources of short-term credit, without ensuring the existence of viable alternatives, is not only foolish and an abuse of regulatory authority – it drives consumers into the waiting arms of illegal, unregulated lenders.