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Financial industry urged to eliminate overdraft fees; CFPB urged to write rules
WASHINGTON -- The Consumer Financial Protection Bureau (CFPB) has released research showing that the financial sector overrelies on overdraft fees and non-sufficient funds (NSF) revenue, which reached an estimated $15.47 billion in 2019. Ironically, one of America’s 15 largest banks, Capital One, announced earlier in December that it will eliminate all overdraft and NSF fees.
In response, Mike Litt, U.S. PIRG’s consumer campaign director, issued the following statement:
“The CFPB’s latest research reinforces that financial institutions unfairly extract billions of dollars from consumers with overdraft fees.
“And banks pick on those who need the most financial help. Fewer than 9% of consumer accounts provide 80% of overdraft revenue.
“The entire industry should follow Capital One’s lead and eliminate all overdraft fees. Until that happens, we need policy makers to step in to protect bank customers.
“We welcome the CFPB’s announcement that it will be leaning into its supervisory and enforcement powers against banks that rely heavily on overdraft fees. We urge the CFPB to also use its rulemaking authority to stop these abusive fees in the first place.”
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