National CAPACD Applauds CFPB Rule to Fight Excessive Overdraft Fees
National CAPACD welcomes the Consumer Financial Protection Bureau’s (CFPB) proposed rule released today to address high-cost overdraft fees charged to consumers from the country’s 175 largest financial institutions with assets of $10 billion or more.
According to the CFPB, these overdraft fees have risen to an average of $35. In many cases, they are triggered for consumers overdrafting for purchases less than the institution’s fee for overdrafts, and the original debt amounts are typically paid back in three days or less. They also disproportionately impact low-income households and communities of color that are least able to afford these additional fees. The largest financial institutions’ total revenue from consumer overdraft fees alone is billions of dollars.
“National CAPACD applauds the CFPB’s continued efforts to mitigate excessive overdraft and junk fees in consumer financial products and services,” said Anju Chopra, Director of Policy at the National Coalition for Asian Pacific American Community Development (National CAPACD). “These inequitable fees especially harm low-income consumers who have to pay back much more than they initially overdrafted. For many cash-strapped Asian American, Native Hawaiian, and Pacific Islander (AA and NHPI) consumers, these fees are a barrier to building wealth and limit the opportunities that come with greater financial security.”
This is another example of the CFPB’s value to consumers. The Bureau plays a critical role in keeping consumers safe from predatory products and services. It should be shielded from efforts to undermine or weaken it by current and future judicial and legislative actions.