WASHINGTON, D.C. – Today, the U.S. House Committee on Financial Services voted to advance to the full House legislation authored by Congresswoman Carolyn Maloney (D-N.Y.), the Overdraft Protection Act (H.R. 4277).
“Excessive overdraft fees take advantage of families when they experience tough times, making their lives even harder,” said Nadine Chabrier, senior policy counsel at the Center for Responsible Lending (CRL). “The Overdraft Protection Act would provide consumers with much-needed relief by requiring the cost of each overdraft fee to be reasonable, limiting how frequently the fee is charged, and prohibiting the most underhanded practices. The House of Representatives should consider and pass the Overdraft Protection Act without delay.”
“We applaud Ally Bank, Bank of America, Capitol One, Citibank, and other banks that have either eliminated their overdraft fees or dramatically scaled them back in recent months. These banks’ overdraft fee reforms greatly benefit their customers,” Chabrier added. “At the same time, many financial institutions continue abusive overdraft practices, and all consumers should have a baseline level of protection from this exploitation. Congress should send this bill to the president’s desk. Financial regulators should address the harms overdraft fees will continue to inflict on consumers and the overreliance of too many financial institutions on this revenue stream.”
CRL recently provided policy recommendations on overdraft in its comment letter, with other consumer groups, to the Consumer Financial Protection Bureau (CFPB) on junk fees. In 2020, CRL produced a comprehensive report on overdraft fees.
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