Overdraft Fee Reform Advances in Congress

Banks rake in billions in overdraft, NSF fees — but that may soon change

Photo by Jason Dent on Unsplash

The banking landscape is changing, driven in part by a slew of nonbank alternatives in the fintech space. Another factor: An increasingly aggressive regulatory landscape led by the Consumer Financial Protection Bureau (CFPB).

Will Overdraft Fees Become a Thing of the Past?

This week, a key House committee advanced the “Overdraft Protection Act.” Here’s more on that from NewsBreak:

The House Financial Services Committee today passed the Overdraft Protection Act (H.R. 4277) sponsored by Rep. Carolyn Maloney of New York.

The bill enacts overdraft fee limits — limiting the maximum number of fees a customer can be charged in a day, for example. The bill also requires that the fees charged must be reasonable and proportional. Further, the bill prohibits banks from reordering transactions in order to cause a customer to overdraw an account and incur a fee.

I’ve written before about how individual banks are taking steps to reduce or eliminate…