Banks prepare to take on the Biden administration over billions of dollars in overdraft fees
The Consumer Financial Protection Bureau is expected to propose rules this week that further rein in banks’ ability to charge customers a fee when they overdraw their bank account
NEW YORK — The squabble over billion of dollars in overdraft fees that Americans get charged every year is intensifying.
The Consumer Financial Protection Bureau is expected to propose rules this week that further rein in banks' ability to charge customers a fee when they overdraw their bank account. Opponents of the fees often cite the example of a $3 cup of coffee costing someone $40.
The banking industry is gearing up to fight back with a multimillion-dollar marketing and lobbying campaign. While banks have drastically cut back on overdraft fees in the past decade, the nation's biggest banks still take in roughly $8 billion in overdraft fees every year, according to data from the CFPB and bank public records.
The Biden Administration has placed overdraft fees at the center of a campaign against what it calls “junk fees" and has directed government regulators — the CFPB and the Federal Trade Commission — to do whatever is in their power to further curtail the practice.
“It's just taking advantage of people,” President Joe Biden said in October.
Banks charge a customer an overdraft fee if their bank account balance falls below zero. What started off as a courtesy offered to some customers, the popularity of debit cards beginning in the 1990s led to Americans wracking up tens of billions of dollars in overdraft fees.
Caving to popular and political pressure, most of the biggest banks have added safeguards to customers’ accounts to allow them to bring the balance back into positive territory before they incur a fee, which at some banks can
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