Consumer Advocates Call for End to Overdraft Fees

Push Comes Amid Capital One’s Move to Eliminate Fees

Advocates at Consumer Federation of America (CFA) are calling on banks across the nation — especially the biggest banks with the greatest reach — to end the practice of charging fees for overdrafts. The push from CFA comes a day after Capital One announced it will stop charging the fees.

Capital One Eliminates Overdraft Fees | by Andy Spears | Dec, 2021 | Medium

“This welcome research yet again illustrates the need to put an end to abusive overdraft fees — especially given that these fees are borne predominately by those who can least afford them,” said Rachel Gittleman, Financial Services Outreach Manager at Consumer Federation of America. “Consumers cannot wait for banks to individually put an end to this practice, like Capital One announced yesterday. The cost is just too high — overdraft fees can cost consumers hundreds in a single day and can push people out of the banking system, exacerbating financial exclusion.”

Gittleman is referring to research from the Consumer Financial Protection Bureau (CFPB) indicating that overdraft revenue reached a total of over $15 billion in 2019, with the biggest banks — JPMorgan Chase, Wells Fargo, and Bank of America — bringing in 44% of that total.

Earlier, the CFPB found that nearly 80% of all overdraft revenue is borne by less than 9% of consumer accounts whose account balances average $350 paying…