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Banks Fees Exceed Overdraft Amounts, CFPB Study Finds

Thursday, July 31, 2014

Today, the Consumer Financial Protection Bureau released a report highlighting the need for robust reform on bank overdraft practices. In response Center for Responsible Lending president Mike Calhoun comments:

Today's release underscores the urgent need for reform on banks fees – particularly the practice of tacking on fees on debit card transactions that could be denied at no cost.

A report by the Consumer Financial Protection Bureau found that overdraft fees on debit cards typically exceed the amount of the overdraft itself. The CFPB's examination found that the median debit card transaction that triggers an overdraft is $24 – while the average charges are $34.

This finding is similar to CRL's analysis of checking account data in which the typical debit card transaction that triggered a fee was $23.

We also found that the average amount overdrawn was $20 meaning consumers paid $1.75 in fees for every $1 overdrawn.

Adding insult to injury, consumers get hit even harder when banks reorder transactions to trip consumers into paying higher fees and charge additional fees each day an account is overdrawn.

Thankfully, some banks have begun stepping away from these abusive practices. The CFPB needs to extend consumer protections across the industry. The CFPB should use its authority to ban or limit overdraft fees on debit card and ATM transactions and rein in excessive bank fees on all checking account transactions.

To discuss Mike Calhoun's comments or request an interview with a CRL spokesperson on overdraft, please contact Catherine An at or 202-349-1878.

For more information, contact Catherine An at 202.349.1878 or