Will Overdraft Fees Become a Thing of the Past?
Consumer Bureau pushes banks to end practices that harm consumers
The Consumer Financial Protection Bureau (CFPB) recently released a chart of the nation’s top 20 banks and their overdraft fee practices. The CFPB notes:
Recent CFPB research showed that banks continue to rely heavily on overdraft and non-sufficient fund (NSF) fees, which cost Americans an estimated $15.5 billion in 2019.
In recent weeks, however, we’ve seen an uptick in banks changing their overdraft and NSF programs.
Wells Fargo Joins Banks Eliminating NSF Fees | by Andy Spears | Jan, 2022 | Medium
While the CFPB suggests recent moves are encouraging, they also note they will continue to urge banks to move away from a reliance on punitive fees:
We’re continuing to monitor these developments to better understand their impact, and to work to ensure banks continue to reduce their reliance on overdraft and NSF fees.
“Rather than competing on quality service and attractive interest rates, many banks have become hooked on overdraft fees to feed their profit model,” said CFPB Director Rohit Chopra. “We will be taking action to restore meaningful competition to this market.”
Previous research also suggests that consumers are hit with billions each year in punitive fees.
Nearly $30 Billion in Punitive Fees | by Andy Spears | Jan, 2022 | Medium
What’s your experience? Do you bank with one of the major banks? Is your bank changing its overdraft policy? How have overdraft fees impacted your financial experience?
