October 31, 2022

On Sept. 8, 2022, the Consumer Financial Protection Bureau (CFPB) issued a consent order requiring one financial institution to pay a $50 million penalty and to refund at least $141 million to consumers allegedly harmed by the bank’s overdraft practices.1 The bank’s overdraft fees, referred to by the CFPB as “authorized-positive” fees, were charged on transactions that were authorized with a positive balance in the account but settled without sufficient funds to cover the transaction, resulting in an overdraft. The CFPB’s action follows the market trend of increased regulatory scrutiny of overdraft and non-sufficient fund (NSF) fees charged by financial institutions to their deposit customers.

Despite a number of headwinds facing banks this year, including high inflation and an uncertain economic environment, one of the top concerns for community banks is retaining talent. Around 70% of banking leaders said retention was a challenge, as was maintaining “a large enough workforce to do work,” according to a recent survey from Arizent, the publisher of American Banker.

Making more money will not solve your problems if cash flow management is your problem,” said Robert Kiyosaki, author of Rich Dad Poor Dad. As your company grows and cash outflows exceed cash inflows, implementing cash management strategies starts with asking why you have a cash deficit.

The pandemic created a unique confluence of events that affected the lending market. As recently explored by the Federal Reserve, bank deposit growth soared during the pandemic,
with total deposits increasing more than double the pre-pandemic growth rate.