NEW YORK(

TheStreet

) --- The Consumer Financial Protection Bureau plans to investigate the overdraft fee practices of the largest banks, including

Bank of America

(BAC) - Get Report

,

JPMorgan Chase

(JPM) - Get Report

and

Wells Fargo

(WFC) - Get Report

.

CFPB Director Richard Cordray said the investigation would focus on whether banks misled consumers when the

Federal Reserve

put in place regulations for overdraft protection in 2010 know as "Reg E", according to an emailed statement cited by

Bloomberg

"With today's technologies, consumers have more opportunities to access their checking accounts and cause overdrafts," Cordray is quoted as saying in a statement. "But overdraft practices have the capacity to inflict serious economic harm on the people who can least afford it."

In 2011 Bank of America, JPMorgan and several other large banks agreed to pay hundreds of millions to settle a private consumer class action suit accusing them of charging excessive overdraft fees.

The deal was part of a nationwide settlement with lenders regarding fees, which accused banks of "re-ordering", or processing transactions in terms of size instead of chronological order in an effort to maximize overdraft fees.

Late last year a report from Credit Suisse argued that Bank of America had been the hardest hit by the restrictions on overdraft fees imposed by Reg E, costing the bank $3.3 billion annually. The same report said that Wells Fargo lost $1.4 billion annually while JPMorgan missed out on $1.077 in revenue.

Citigroup

(C) - Get Report

shares may see some action following a Wall Street Journal report claiming that the company could see a potential write-down as it unwinds its minority stake in Morgan Stanley Smith Barney.

Morgan Stanley has the option to purchase Citigroup's stake in the joint venture starting in spring 2012, but may offer a lower price since the value of the brokerage has deteriorated since the crisis.

The bank could be facing a potential $1.8 billion after-tax earnings hit from the write-down potentially.

Economic data on Wednesday morning could give some momentum to bank stocks, especially the existing home sales report at 10:00 a.m. which would offer a glimpse into the state of the housing market.

Separately, the Mortgage Bankers Association will also release data on weekly applications for mortgages, a leading indicator of single family home sales and construction.

Investors are hoping for that home prices will bottom in 2012, which will spell good news for banks whose fortunes are tied to the housing market and the economy.

In related news, the Federal Housing Finance Agency on Tuesday called for a smaller role for housing giants Fannie Mae and Freddie Mac in the future and proposed the creation of a single securitisation platform that could be used even if the agencies ceased to exist in the future.

Fannie and Freddie were taken into conservatorship in 2008 and their bailout is said to have cost $180 billion in taxpayer money to date. The government is yet to take a decision about their future.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.