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Dear John,
The Consumer Financial Protection Bureau (CFPB) is seeking official public comment on their proposed rule to cap exploitative overdraft fees, and they need your input now.
This long-awaited proposal is part of the CFPB’s overall effort to eliminate junk fees from the banking industry. Overdraft fees are currently as high as $39 each, and they can pile up quickly if there are multiple transactions before the individual realizes they are in overdraft territory.
Low-income earning families are the most likely to be impacted by overdraft fees, and they are the ones least able to pay these punitive amounts.
On the other hand, it doesn’t cost a bank much to offer overdraft protection, which is essentially a kind of short-term loan, and therefore subject to the consumer protections of the Truth in Lending Act. Indeed, the bank will also be charging interest on the overdraft amount, so their costs will be covered with the most minimal of fees.
The CFPB is considering setting a benchmark fee of $3, $6, $7, or $14 dollars, and they are seeking input on what the public feels is an appropriate amount. Since low-income earning families are the most likely to be affected, click here to send the CFPB a message in favor of the $3 fee now.
Approximately 175 of the largest banks in the country -- only those with assets over $10 billion -- will be affected by the new rules. They will have the option of using the CFPB’s benchmark, or charging a fee pegged to their demonstrated actual costs.
With new rules in place, consumers could save $3.5 billion or more each year, by the CFPB’s estimates.
As you can imagine, the banks are not happy with this proposal, and they are unleashing an army of lawyers to lobby against it. That’s why the CFPB needs to hear from us, so they will have first-hand evidence of how the public will be affected, and not rely only on high-powered arguments from the big banks with billions in assets.
Please sign and send your message to the CFPB today. $3 is plenty to cover the costs of a multi-billion dollar bank that will be collecting interest on the overdraft anyway.
Thank you for helping bring fairness and integrity to our banking system.
Robert Reich
Inequality Media Civic Action
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