WASHINGTON, D.C. – As the Consumer Financial Protection Bureau finalizes a new rule expected to save consumers billions of dollars by limiting often-hidden and excessive overdraft fees, banking industry CEOs that abuse the practice are escalating their misinformation campaign against the Biden administration’s effort. The Consumer Bankers Association reportedly rolled out a new website “touting the benefits of bank overdraft” fees and penalties despite the clear financial harm they inflict on millions of families.
The latest attack in the industry smear campaign comes on the heels of a national survey finding that 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. The bank trade group’s propaganda website conveniently ignores the fact that “most households incurring overdraft fees had available credit on a credit card.” In fact, among households charged 1-3 overdraft fees in the past year, 68% had credit available on a credit card, while 62% of households charged 3-10 overdraft fees had credit available on a credit card. In households charged more than 10 fees in the past year, 51% still had credit available on a credit card.
Greedy banking CEOs claim the practice of price-gouging with obscene overdraft fees somehow does consumers a favor by separating them from billions in hard-earned money. Industry lobbyists claim a $35 overdraft fee on a gallon of milk or loaf of bread teaches Americans financial responsibility even though the excessive penalties are often buried in the fine print. Industry lobbyists conveniently ignore the fact that many banks that did away with the overdraft practice remain highly profitable. The bottom line is that no one likes fees and it’s time bank and credit union executives realize this and end the practice that only pads their profits and harms customers."