The CFPB took steps yesterday that underscore the barrier high-cost overdraft programs pose to many consumers, noting that they can lose their bank account as a result excessive fees. The Bureau urged banks to offer and encourage use of accounts with no overdraft fees, noting that while some banks already offer such accounts, many do not.
Rachel Anderson, Director of Faith Affairs and the leader of CRL's work on abusive overdraft fees, said:
It is difficult to imagine the impact on struggling families who have gained a foothold into the mainstream financial system through access to a bank account only to lose that account because of high-cost and excessive overdraft fees.
Overdraft programs were once a courtesy for customers but the high cost and unfair practices have turned these programs into fee traps for financially vulnerable consumers.
Consumers can be thankful the Consumer Bureau is taking these steps. Banks should certainly offer accounts that are free of unfair overdraft fees but we need to go further. New rules on overdraft fees are necessary if all consumers are going to have access to sustainable accounts on fair terms.
For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Charlene Crowell at charlene.crowell@responsiblelending.org or 919.313.8523