WASHINGTON, D.C. – Major banking and credit union trade groups have already begun a public smear campaign against an unreleased final rule from the Consumer Financial Protection Bureau that is expected to limit often-hidden and excessive overdraft fees and save consumers billions of dollars. Tellingly, the “warning shot” open letter to the Biden administration from the American Bankers Association, America’s Credit Unions and Independent Community Bankers of America conveniently ignores the harm such junk fees have on working families and the economy.
The industry letter comes on the heels of a national survey finding consumers continue to suffer from excessive overdraft fees. The survey found over a quarter of consumers reporting being charged an overdraft or NSF fee within the past year. Among consumers in households charged an overdraft fee in the past year, 43% were surprised by their most recent account overdraft and only 22% expected it. And among households that frequently incurred overdraft/NSF fees, 81% reported difficulty paying a bill at least once in the past year. Meanwhile, wany consumers who were charged overdraft fees had access to a cheaper alternative, such as available credit on a credit card.
Lobbyists for big banks, credit card companies -- and Congressional Republicans in their pocket --- will say or do anything to keep price-gouging everyday Americans with hidden junk fees that serve no purpose other than pad profits. Industry CEOs haven’t even seen the administration’s rule yet, but they’re already complaining how much it will save consumers who are tired of excessive backdoor fees, like a $35 charge on a gallon of milk. If a bank CEO’s business model is dependent on tricking and gouging Americans with surprise fees, there are plenty of banks that got rid of the practice and remain highly profitable they can choose to model after.”