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CFPB Overdraft, NSF Fee Report Overview:
- Who: The Consumer Financial Protection Bureau (CFPB) released a report on the practice of banks charging customers overdraft and other fees.
- Why: The CFPB argues banks rely heavily on the fees—which it says can be difficult for customers to avoid—for their revenue.
- Where: The CFPB report included banks nationwide, including Wells Fargo, JPMorgan Chase, and Bank of America.
The Consumer Financial Protection Bureau announced this week that it is planning to crack down on banks charging excessive overdraft fees.
The CFPB report says research shows banks took in an estimated $15.47 billion in revenue from overdraft fees in 2019, exceeding that of ATM fees and normal account service fees.
Wells Fargo, JPMorgan Chase, and Bank of America collected more than a third of the total estimated revenue from 2019, according to the agency.
The CFPB claims that the banks have been getting steady revenue from overdraft and non-sufficient fund fees, revealing that, since 2015, the fees represent about two thirds of those collected by larger banks each year.
“Rather than competing on transparent, upfront pricing, large financial institutions are still hooked on exploitative junk fees that can quickly drain a family’s bank account,” said CFPB Director Rohit Chopra, reports Law360.
Chopra argued that intervention is needed to better regulate the overdraft and NSF fees, which he claims banks are tempted to rely on for revenue but that may be unfairly difficult for consumers’ to avoid
“The market will not solve this on its own,” Chopra said, reports Law360.
CFPB Pledges Action On Bank Overdraft Fees
Chopra vowed to take action against banks who were engaged in charging unlawful overdraft fees — specifically keeping an eye on those who rely the heaviest on them — while adding the agency may implement new policy guidelines, reports Law360.
“Ultimately, we plan to inform institutions on where they stand relative to their peers when it comes to overdraft,” Chopra said, reports Law360. “We believe sharing that information will increase transparency and help against the race to the bottom we have seen in this market.”
Reaction to the report from those within the bank industry was critical, with Consumer Banker Association President Richard Hunt tweeting that the CFPB’s research “fails to reflect the innovations unveiled by America’s leading banks to meet the evolving needs of customers.”
The CFPB’s report came on the same day that Capital One announced it will be eliminating overdraft and NSF fees for its retail customers, as reported by CNBC.
Last month, the CFPB set its sights on First Cash, Inc., one of the nation’s largest pawnshop operators, claiming the company and one of its subsidiaries issued service members loans with excessive interest rates.
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3 thoughts onCFPB Targets ‘Exploitative Junk’ Overdraft, NSF Fees in New Report Targeting Major Banks
USAA. 22 yr member. Multiple NSF fees and I only n have my pension. CEO said he was stopping this publicly. He lied. I emailed of my concerns. Asked about a little help on a cash advance to go see my daughter….only child…grad high school. Last minute. Hadn’t spoken since eight yrs old. Bank says no cash advance, sent me to small loans…I didn’t want. Hard check look on credit messed me up. Denied loan. Meanwhile, same bank and asked for bereavement help to fly to see my dying dad and nope, they refer later me like I was a nut job for asking for help because I was desperate and they marked me as high risk. Often freezing my card for trying to protect me. When I travel I tell them but I still try do UAE it and they ask me is this yiu? Via text…meanwhile I lose b the opportunity, the sale onli!ne, the spot in li!ne, the next party to be seated at a table….. Three times I had to have returned checks sitting for a few yrs with the government of my child spy I paid over…not run court thru the banks camera app but I suffered the consequences.. Just like with NSF the chronology involved screed me over. Credit shot, affected same company bank with higher interste…had car insurance for manynyrs…its USAA…great right!? They fraudulently submitted a claim on my vehicle but it was the wrong vehicle…a newer one but 3000 miles away and they tool the call from me about my older vehicle that was wrecked as claim still not settled. Car insurance fraud from USAA. Disputes on my account where a vendor goes thru PayPal or cashapp to link to my bank and take money without auth. isn’t covered by bank. I have to prove first to them it wasn’t me. Once they cancelled my membership because n they heard I went to jail. I was innocent and got released the next day but they listened to an ex wife over me? Currently waiting on a title and USAA title Department were told by me to request it from WA state DOT and after almost 2 months they said sorry but meanwhile my vehicle sits unused because it is not registered for the road yet. Same bank….yes! Why am I loyal to them?
Pnc bank charges unfair overdraft fee some would even say it’s predatory!!! They charge most of the larger overdrafts first which make your account go into the negative and then charge the smaller ones. Also the window to make your account positive is very small. Sometimes they have made charges to my account as late as 9:59pm and the window to make a deposit so your account won’t be negative is 10pm that same business day!!! They are literally treating the small banking consumer unfairly!!!!!!
I 100 percent back this. PNC is the worst. I received 25 over draft fees in a matter of a week. They didn’t let me make a deposit to make it positive again. It was negative $1.20 and I got hit with 3 $36 dollar fees and it just kept going day after day.