FOR IMMEDIATE RELEASE: February 5, 2025
CONTACT: Jarice Thompson, jarice@ourfinancialsecurity.org
Broad Coalition Rejects Attempts to Gut Rule that Will Save Consumers Billions
Today, the Republican House majority revealed draft legislation to stop the Consumer Financial Protection Bureau’s (CFPB) overdraft rule from going into effect on October 1, 2025.
The CFPB’s overdraft fee rule will reduce big bank overdraft fees from $35 per transaction down to $5, a move that will save the 23 million households in the United States that pay overdraft fees $5 billion annually, or $225 per family.
Americans for Financial Reform delivered 100,000 letters to representatives to protect the rule. A fact sheet on the new overdraft rule can be found here. AFR release can be found here.
“Closing this paper-check era loophole not only saves households hundreds of dollars in excessive overdraft fees each year,” said Christine Chen Zinner, senior policy counsel at Americans for Financial Reform, “this proposal will help reduce the number of people who become underbanked and unbanked due to overdraft fees. Many very large financial institutions have already done away with these fees – it’s time to level the playing field for everyone.”
“People pay billions of dollars in overdraft fees every year. A $35 fee is a huge hurdle for millions of American families struggling to put food on the table, but nothing more than a profit tactic for the greediest banks. Despite industry outcry, the CFPB is lowering costs and protecting people from an exploitative profit-maximizing scheme.” Tony Carrk, Accountable.US executive director.
“The CFPB’s rule limiting overdraft fees reduces the obscene volume of abusive and junk fees that poor and working-class people–especially marginalized consumers–are subjected to by their banks in the U.S.,” said Spencer Watson, Executive Director of Center for LGBTQ Economic Advancement & Research. “Removing the overdraft fee limits will line the coffers of bankers and investors with millions of dollars picked from the pockets of everyday Americans, leaving those affected with even less to pay for their rising household costs.”
“Overdraft charges could be the difference of a family having enough to eat for the week. Many times is more than 10% of their gross pay,” said Mata Crawford, Community Fresh Start
“The CFPB’s Overdraft fee rule protects consumers and gives financial institutions options. If big banks don’t want to limit their overdraft income they can provide consumers with an overdraft line of credit and call the product what it is—a loan with an APR,” said Ruth Susswein, Consumer Action’s Director of Consumer Protection.
“Overdraft fees have become a money-maker for the banks, harming consumers who can least afford it. Overdraft fees need to be small, waived and limited,” said Melissa Marquez, Genesee Co-op Federal Credit Union.
“At Latino Community Development, we strongly oppose any rollback of the (CFPB) overdraft fee rule, which protects hardworking families in South Carolina from predatory fees. Weakening these protections would disproportionately impact low-income and underserved communities, deepening financial insecurity. We stand firmly in support of maintaining the rule to promote economic fairness and stability for all,” said Tanya Rodriguez-Hodges of Latino Community Development.
“The CFPB once again proves that is an ally and protector of the American consumer and NALCAB is proud to carry the message of so many which led to this rule change and the protection and the shield it provides Latino families,” said Clarinda Landeros, Director of Public Policy, NALCAB. “This provides clear rules of the road to ensure consistency and clarity with overdraft products offered by the largest banks and financial institutions. We urge members of the new Congress and President-elect Trump to back the CFPB’s decision and stand with struggling families,” said Clarinda Landeros of National Association for Latino Community Asset Builders (NALCAB).
“Excessive overdraft fees that big banks charge to pad their bottom lines have real life consequences for everyday families,” said Christine Hines, senior policy director at the National Association of Consumer Advocates. “It’s critical that Congress upholds the CFPB’s commonsense rule, which is aimed at reining in overdraft abuses,” said Christine Hines of NACA.
“The CFPB rule to make overdraft limit fees outs an end to an unfair and abusive practice in the banking industry, which is designed to maximize profits from the misfortunes of Americans struggling to make ends meet from paycheck to paycheck. We call on the New Jersey Congressional delegation and all members of Congress to stand with the public and defend the rule from attacks and roll backs,” said Beverly Brown Ruggia of New Jersey Citizen Action.
“Mega-banks bilk Americans $5 billion a year with junk overdraft fees. Members of Congress must not side with Wall Street,” said Bartlett Naylor of Public Citizen.
“This rule addresses a long-standing problem. Penalty fees should not be a cash cow, as they often drain money from those who can least afford it,” said Ann Badour of Texas Appleseed.
“The CFPB’s rule capping overdraft fees at $5 makes the financial system fairer. Big banks have used excessive overdraft fees as a billion-dollar profit center for years. Members of Congress should defend the rule and stand up for families across the country who would save an average of $225 a year instead of defending Wall Street.” Saisha Rattan, Senior Economic Policy Analyst, 20/20 Vision
“People with disabilities have long been sidelined by financial systems that fail to account for the economic realities of our community. Nearly half—48%—of working-age disabled households have no or reduced access to bank accounts, also called being unbanked or underbanked. Being unbanked or underbanked means a person has limited access to essential financial services and leaves many reliant on high-cost alternatives. Overdraft fees only deepen this exclusion, penalizing individuals on fixed incomes, those earning subminimum wages, and those facing high disability-related expenses. Overdraft fees are not just an inconvenience—they are a structural barrier that makes everyday banking more costly and inaccessible for people with disabilities said Dewayne Johnson, Civic Engagement Manager at the American Association of People with Disabilities.What is bad for our economy is often bad for the disability community. Eliminating predatory overdraft fees is critical to ensuring that disabled individuals have equal access to financial stability and independence, even though our economic system is designed to work against us.”
“A $35 overdraft junk fee threatens to exhaust scarce funds needed by struggling households to pay for groceries and gas. These fees, often coming as a surprise, push too many hard-working Americans out of the banking system,” said Adam Rust, director of financial services for the Consumer Federation of America. “Reversing the overdraft rule will make it harder for many people to make ends meet. A vote against the overdraft rule is a decision to prioritize Wall Street’s profits above the needs of people living paycheck to paycheck. CFA calls on Congress to reject this bill. Instead of making life better for big banks, our elected officials should pursue an agenda serving the needs of everyday Americans.”
“Predatory overdraft fees can destabilize families’ economic security. For our clients, a single overdraft can trigger a snowball of fees, put a bank account in the red, and leave them without money for rent, food and medicine,” said Kerry Smith. We urge the Pennsylvania delegation to stand up for our most financially vulnerable and oppose any efforts to rollback this important new rule.”
“The CFPB’s overdraft rule protects college students from predatory banks that nickel-and-dimed them into financial ruin with junk fees on college-sponsored prepaid and debit cards. For years banks treated college students as walking dollar signs, loading these campus cards with unexpected, unavoidable, and unaffordable fees that included overdraft fees, insufficient fund fees, and late fees—exacerbating the student debt crisis and pushing students further into the red. We urge Congress to protect working people and students, not the steep profits of Wall Street banks,” said Aissa Canchola Bañez, Policy Director of Student Borrower Protection.
“Now more than ever, consumers need protections from fees that undermine their financial stability. Repealing the overdraft fee rule is a major step backwards and doesn’t serve the interests of families in New York City or across the United States.” said Michelle de la Uz, Executive Director, Fifth Avenue Committee
“Overdraft fees in most cases hurt struggling families causing them to get further and further behind and in debt and need to be strongly regulated,” said Lois M. Healey of the Affordable Homeownership Foundation.
“ValleyInterfaith are demanding that overdraft fees be limited. The Rio Grande Valley of Texas has one of the largest working poor populations in America, adding overdraft charges only makes it harder to survive day after day,” said Jose Hinojosa.
“United South Broadway Corporation serves thousands of low-income homeowners in New Mexico who are especially vulnerable to escalating overdraft fees that can tip them into foreclosure and onto the streets,” said Deborah Norman of the United South Broadway Corporation. Most low-income New Mexicans (57%) own their homes; many families have owned their homes for generations. This bill will help protect families and stabilize neighborhoods.”
“The burdens of struggling economically do not need need the extra weight of bad faith overdraft fees which have long preyed on our most economically vulnerable citizens,” said Danny Knee. We need common sense limits to the fees since too many large banking institutions refuse to voluntarily solve this problem.
“We have worked very hard on consumer financial protection initiatives for our citizens in this poor Tennessee county. They cannot afford junk fees, fraud, scams or any other detrimental actions affecting their precarious financial futures. The overdraft fee rule serves a vital purpose for our citizens as we work to get more of them banked,” said Regina Morrison Newman of Shelby County Trustee.
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