FOR IMMEDIATE RELEASE: Feb. 5, 2025
CONTACT: Carter Dougherty, carter@ourfinancialsecurity.org
House Republicans Aim to Gut Measures Slashing Junk Bank Fees
The Republican-led House Financial Services Committee is devoting its first hearing of the new Congress to destroying a CFPB final rule that would slash a particularly abusive big-bank junk fee – overdraft charges – from $35 down to $5, which would save people $5 billion each year, or $225 per household.
Although the hearing is advertised as a meeting about community banking, the Republican leadership has included on the agenda a Congressional Review Act resolution nullifying the overdraft rule, even though the rule only applies to bigger banks and explicitly exempts community banks, defined as those with less than $10 billion in assets.
“Overdraft fees cost people a lot of money and are the top reason people lose access to bank accounts, so Republican leaders are only doing favors for big banks if they seek to overturn this rule,” said Christine Zinner, senior policy counsel at the Americans for Financial Reform Education Fund. “Instead of working overtime to push the bank lobby’s agenda, the committee should side with everyday people to keep this overdraft junk fee rule in place.”
AFR’s statement for the record can be found here. A fact sheet on the CFPB’s overdraft fee rule can be found here.
Earlier this year, 142 consumer advocacy, civil rights, servicemember, legal services, and community groups submitted comments strongly supporting the CFPB’s overdraft fee rule. Americans for Financial Reform delivered 100,000 letters to lawmakers calling on Congress to protect the rule.
Many large financial institutions including Citibank and Ally Bank have already done away with overdraft fees, demonstrating that these charges are not essential to bank operations or profitability. This rule would still allow higher overdraft fees when covered banks fully and transparently disclose how much those fees cost consumers, empowering people to avoid accounts or transactions that would incur these fees.
“The CFPB’s efforts to curb overdraft fees and junk fees as a whole are critical steps to making banking fairer,” said Amanda N. Jackson, director of consumer campaigns at AFR. “Rolling back the rule would disrupt safeguards and protections for communities of color and everyone that need and deserve safeguarding from the fee-gouging whims of the financial services industry.”
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