In its latest step to protect consumers from the financial industry’s abusive fees, the Consumer Financial Protection Bureau (CFPB) proposed a rule to curb credit card late fees – an effort that is expected to save American families $9 billion per year. This exploitative practice is currently protected by an expansive immunity provision created by the Federal Reserve, a loophole that has allowed credit card companies to escape accountability for what would otherwise be considered an illegal fee. In 2020 alone, credit card companies profited $12 billion from late fees.
Despite Congress’s ban on excessive late fees, the Federal Reserve’s loophole has allowed greedy credit card companies to collect exorbitant charges that were designed to profit from consumers living paycheck-to-paycheck. The CFPB’s crackdown on these exploitative charges will redirect billions from the pockets of big banks to consumers' wallets and our economy. Today’s rule proposal proves that the bullying behavior of companies who abuse Americans for their own profit will not stand from the CFPB.”
Liz Zelnick, Director Of Economic Security And Corporate Power
This follows the CFPB’s October 2022 announcement of new guidance on overdraft fees, officially launching the Bureau’s effort to eliminate exploitative “junk fees.” A previous analysis from Accountable.US found that in the first half of 2022, three of the largest “megabanks”—Bank of America, Wells Fargo, and JPMorgan Chase—reported over $37 billion in net income while reaping at least $7.8 billion in revenue from service charges on consumers’ deposit accounts, including over $1.6 billion from overdraft fees.
Meanwhile, as the CFPB ramps up its actions to eliminate overdraft fees and protect consumers, business groups like the U.S. Chamber of Commerce are frantically trying to weaken the agency’s rulemaking power by filing a lawsuit to reverse its new crackdown on discrimination in the industry.
MORE FROM A.US:
- Mega Banks Testifying Today Reaped $1.6B From Abusive Overdraft Fees in 2022 Alone
- Bill Protecting Consumers from Abusive Overdraft Fees Advances Over Objections of Conservatives in Pocket of Bank Industry
- REPORT: Congressional Conservatives Obstructing Crackdown on Predatory Overdraft Fees Took Over $3M From Big Banks That Abuse Them
- Watchdog: U.S. Chamber Smear Campaign Against CFPB Director Funded By Greedy Banking Chamber Members With History of Consumer Abuse
- Major Banks That Abuse Overdraft Fees Gave Their CEOs Huge Raises and Have Histories of Consumer Mistreatment