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insured banks holding certain custodial accounts to maintain The form of records showing consent varies depending on the
accurate account records so that the individual owner of the funds channel through which the consumer opts into overdraft services,
can be identified, including a requirement to reconcile the account according to the CFPB. For example, for consumers who opt
for each individual owner on a daily basis. into overdraft services in person or by postal mail, a copy of a
form signed or initialed by the consumer would constitute proof.
“If a bank fails, the FDIC cannot pay deposit insurance to the
depositors based on inaccurate or incomplete records,” FDIC Recorded phone calls and securely stored and unalterable “electronic
Chairman Martin Gruenberg said. “Knowing the identity of the signatures” also would be considered proof.
actual owners of the deposits – the so-called ‘beneficial owners,’ Read more: https://www.consumerfinance.gov/compliance/
who are often consumer – and knowing their account balances are circulars/consumer-financial-protection-circular-2024-05/
necessary for the deposit insurance to pass through the nonbank
third-party company… to the actual owners of the funds.” More Employees Have Access

Gruenberg also cited the collapse of the fintech firm Synapse earlier to Financial Planning Benefits
this year as a reason a new rule was needed. That failure locked more Through Work
than 100,000 U.S. customers with $265 million in deposits out of
their accounts, according to CNBC. While financial stress among U.S. employees remains high, access to
The proposed rule would require banks to have “direct, continuous financial planning benefits through work has doubled since 2023,
and unrestricted” access to the records of the beneficial owners, according to PNC Bank’s annual survey on financial wellness in the
including in the event of a business interruption or bankruptcy of workplace.
the third party. Banks would be required to establish and maintain Sixty-eight percent of employees surveyed said financial stress
written policies and procedures to ensure compliance with the negatively affects their overall mental health, with respondents
rule’s requirements. They would be required to complete an annual spending around three hours a week worrying about their finances
certification of compliance, signed by an executive officer, stating at work. Three in five respondents said they are living paycheck to
that the institute has implemented and tested its recordkeeping paycheck. Among employers, three in four respondents said workers’
requirements. They also would be required to file annual reports financial stress negatively affects their operations.
that, among other things, list the account holders that maintain
custodial deposit accounts with transactional features, the total Access to financial planning benefits through work has expanded
balance of those custodial deposit accounts, and the total number of since 2023, with 28% of employees saying they now have access to
beneficial owners. benefits compared to 14% last year, according to PNC. Thirty-six
percent of employers offered financial education in 2024, compared
Public comments on the proposal are due 60 days after its to 30% last year. Employees were also asked why they do not work
publication in the Federal Register. with a financial professional, with most saying professionals either

Read more: https://www.fdic.gov/system/files/2024-09/fr-npr-on- cost too much or they don’t have enough money to afford their
requirements-for-custodial-deposit-accounts.pdf services. Many workers also said they did not know how to find a
professional.
CFPB: Banks Need Proof of Read more: https://www.pnc.com/content/dam/pnc-com/pdf/

Customer Consent For ATM, corporateandinstitutional/organizational-financial-wellness/
organizational-financial-wellness-workplace-report.pdf
Debit Card Overdraft Fees

Banks and credit unions can be held legally liable if there is no FinCEN Analysis Finds Mail
proof that they obtained affirmative consent from customers before Theft-Related Check Fraud a
charging overdraft service fees for ATM and debit card transactions, Widespread Problem for Banks
the CFPB said in a circular intended for regulators and law
enforcement. The Financial Crimes Enforcement Network received more than
The circular re-states Regulation E’s “opt-in” requirement that 15,000 Bank Secrecy Act reports about possible mail theft-related
financial institutions must obtain the customer’s consent – or opt-in check fraud during a six-month period in 2023, which were
– before imposing a fee for an overdraft resulting from a point-of-sale associated with $688 million in actual or attempted transactions,
debit card or ATM transaction. The CFPB stated that Regulation the agency said in a financial trend analysis on the problem. Banks
E “sets forth an opt-in, rather than opt-out, process before financial filed 88% of check fraud reports, the majority coming from small- to
institutions are permitted to assess fees for covered overdraft services,” medium-sized banks.
the bureau said.

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