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.
Today, the Consumer Financial Protection Bureau (CFPB) finalized new protections against overdraft fee abuses at the largest financial institutions, closing a decades-old loophole that allowed big banks to gouge their customers for an inexpensive service. The CFPB’s overdraft fee rule will reduce most overdraft fees from $35 per transaction down to $5, saving households in the United States $5 billion annually.
AFR’s Consumer Policy Counsel Elyse Hicks testified at today’s hearing in the House Financial Services Committee examining overdraft fees.
AFR led a letter to the House Financial Services Committee in support of Rep. Carolyn Maloney’s Overdraft Protection Act of 2021.
We appreciate the work of the CFPB on drawing attention to the harms of overdraft fees, which take billions of dollars a year out of the pockets of mostly low- and moderate-income households to pad the bottom lines of the country’s big and small banks. And among those households, Black and Latinx households were also far more likely to incur overdrafts. We urge the CFPB to use all the tools that Congress gave it to protect consumers from abuses, including drafting tough new regulations.
AFR Ed Fund joined our colleagues to send a letter opposing the National Credit Union Administration’s proposal to permit federal credit unions to leave negative account balances open for longer than the current limit of 45 days without any limits on overdrafts, overdraft fees, or NSF fees that can be assessed during this period. This proposal fails to consider the substantial risks it poses on credit union members who are facing economic challenges during the pandemic by exposing them to additional fees that only compound their financial distress.
The development of a real-time, ubiquitous payment system is an especially complex, expensive undertaking. Because of the scale of the endeavor, and its potential to impact the American public as a whole, we firmly believe the Board is the appropriate entity to establish a universal 21st century payments system.
Coalition letter urging the Federal Reserve to build in strong consumer protections into the design of its new real-time payment system
On September 9, 2019, 34 organizations sent a letter in support of the Overdraft Protection Act of 2019.
AFREF and our partners sent a letter to the CFPB urging it not to weaken the current protections in the overdraft rule.