The Director of the CFPB offered clarification on his call to action for financial institutions to offer accountsthat can't produce a negative balance during his fifth webinar withthe NCUA on Feb. 9.

NCUA Chairman Debbie Matz hosted Director Richard Cordray duringthe afternoon webinar in which he was quizzed on the agency's callto action and a bulletin warning that inaccurate reporting dataused in the checking account screening process could result inaction by the bureau.

In his opening statement, Cordray said there are nearly 10million people who do not have access to financial services. Headded this is in part a result of the accuracy of the screeningprocess.

“These consumers frequently rely on more expensive financialservices that take a big bite out of their earnings,” he added.

Cordray encouraged financial institutions to offer lower-riskaccount options, including accounts that would not allow foroverdrafting the account.

“Because these accounts pose less risk to financialinstitutions, there's less reason to screen out those applicantsfrom opening such accounts,” Cordray said.

“We know that our credit unions are committed to communitydevelopment and financial inclusion,” he said. “This could be partof the answer for the millions of Americans who currently lackaccess to basic financial services that most of us take forgranted.”

When asked, during the Q&A session, how far along the bureauis in the overdraft rulemaking process, Cordray did not offer adirect answer, instead discussing other rules expected to beproposed or finalized first.

One attendee questioned why the CFPB would focus on overdraftprotection because it doesn't produce the most complaints in thebureau's consumer complaint database. Cordray said the CFPB is looking at theoverdraft issue because each regulatory agency has taken differentapproaches to the concern, and regulatory consistency isneeded.

When asked why the CFPB does not use its discretion to exemptsmaller institutions from most of its rules, Cordray explained thatCongress has that authority. Congress decided not to apply athreshold relating to rules from the CFPB.

“Congress made that judgement. I don't feel it's in my authorityto second guess Congress or overrule them on that,” Cordraysaid.

He added the bureau could contour specific rules to allowcertain exemptions within the confines of the language of thoseparticular pieces of the statute,

“[W]e are both willing and quite content to do so,” hesaid.