Consumer Finance Group Applauds CFPB Overdraft Study, Calls for Action

Americans for Financial Reform Wants an End to “Abusive” Practice

As one major bank — Capital One — announced an end to the practice of charging overdraft fees, a leading consumer group is issuing a call for federal action to end the practice at all banks.

Americans for Financial Reform (AFR)is calling on the Consumer Financial Protection Bureau (CFPB) to use data from a study it conducted to draft rules that would essentially prohibit overdraft fees.

CFPB research in 2017 found that 79% bank overdraft and non-sufficient funds (NSF) fees are borne by only 9% of accounts. Frequent overdrafters tend to have low end-of-day balances, low or moderate credit scores, and low or moderate monthly deposits.

Candace Archer, Consumer and Payday Campaigns Manager at AFR outlined the organization’s position:

We appreciate the work of the CFPB on drawing attention to the harms of overdraft fees, which take billions of dollars a year out of the pockets of mostly low- and moderate-income households to pad the bottom lines of the country’s big and small banks. And among those households, Black and Latinx households were also far more likely to incur overdrafts. We urge the CFPB to use all the tools that Congress gave it to protect consumers from abuses, including drafting tough new regulations.