WASHINGTON, D.C. – The Center for Responsible Lending (CRL) in a comment letter urged the Consumer Financial Protection Bureau (CFPB) to bolster its proposed overdraft rule with more measures to prevent very large banks and credit unions from evading the intent behind the rule. The CFPB estimates that, once finalized, its rule could save the 23 million households who pay overdraft fees an average of $150 each year – while the hardest-hit households could save much more.
“High-cost overdraft fees are junk fees paid most often by the least financially secure bank customers. The CFPB’s proposed overdraft rule is a significant step toward enhancing protections for consumers and fulfilling requirements of the law,” said Nadine Chabrier, senior policy counsel of the Center for Responsible Lending. “The CFPB should take additional steps to eliminate abusive overdraft practices and prevent very large institutions from gaming the system. The CFPB should adopt a $6 benchmark overdraft fee, limit the number of times a fee can be charged, prohibit fees on small transactions, and allow a grace period before an overdraft fee is assessed.”
The CRL’s comment letter recommends CFPB incorporate into its rule:
- A $6 benchmark fee;
- A limit of one overdraft fee per month and six per year;
- A blanket $50 transaction threshold before a fee can be assessed; and
- A one business day grace period before an overdraft fee is charged.
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Press Contact: Matthew Kravitz matthew.kravitz@responsiblelending.org