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CRL Joins Congressional Push to Rein in Abusive Overdraft Fees that Cost Consumers Billions Every Year

Wednesday, September 27, 2017

Wells Fargo Practices and Equifax Breach Show that Congress needs to prioritize consumer protections

Members call on CFPB to act on overdraft practices

Maloney bill to end deceptive overdraft practices, crack down on unfair fees based on successful 2009 CARD Act law that has saved consumers billions

WASHINGTON, DC — Today in front of the U.S. Capitol, the Center for Responsible Lending joined Representatives Carolyn B. Maloney (NY-12), Keith Ellison (MN-5), Hakeem Jeffries (NY-8), and Bill Foster (IL-11) in calling on Congress to crackdown on unfair overdraft fees by passing H.R. 3606, the Overdraft Protection Act of 2017. Abusive overdraft fees strip billions every year from the pockets of American families, often through practices designed to maximize overdraft revenue for banks. The most common triggers of the typical $35 overdraft fee are small debit card transactions that are much less than the fee itself. H.R. 3606 would limit financial institutions’ ability to trap consumers in predatory, so-called overdraft "protection" programs (additional background on legislation at bottom). Watch a video of the press conference.

"Financial institutions drain billions of dollars annually from their customers through abusive overdraft fee practices, severely impacting those who can afford them the least—poor and working class families living paycheck to paycheck. Even one overdraft penalty can trigger hundreds of dollars in fees in just a few days and drive a bank customer much deeper in the hole," said Scott Astrada, Director of Federal Advocacy at the Center for Responsible Lending. "Representative Maloney’s bill is a crucial step in addressing this issue and we commend her efforts for making consumer protection a top priority."

"Overdraft fees hit the consumers who can afford them the least – cash-strapped hardworking Americans who are struggling to pay their bills," said Rep. Maloney. "These fees are unfair, deceptive, and outrageously high. The CFPB found that by overdrafting their account, the average consumer pays a 17,000 percent interest rate. This is why I am not only working to pass my Overdraft Protection Act but am also calling on CFPB Director Cordray to act on this before his term ends. Under my bill, overdraft fees will be required to be ‘reasonable and proportional’ to the amount of the overdraft because a cup of coffee shouldn’t cost you $35. These abusive practices have been going on for far too long already, and it’s time that we crack down on them."

"Last year, the world’s biggest banks took $15 billion out of the pockets of hardworking families across America. That’s just wrong," said Rep. Ellison. "People work hard for their money, and banks shouldn’t be nickel and diming them just to underwrite another fat bonus check to a CEO. Rep. Maloney knows our job is to fight for everyday Americans, and that’s why I’m proud to support the Overdraft Protection Act, which will prevent financial executives from taking advantage of working people."

"Families in New York City and across our great nation have been nickel and dimed for far too long," said Rep. Jeffries. "At all times, financial institutions should be in the business of providing the highest level of fair and equitable treatment. The gouging of Americans with unacceptably high overdraft fees can no longer be tolerated. Rep. Maloney should be commended for her leadership."

"I was proud to be in the trenches with Congresswoman Maloney when we passed the Dodd-Frank Consumer Protection Act," said Rep. Foster. "This legislation stabilized our financial system after the Great Recession and instituted reforms so that it would not happen again. But, we still need to continue to work together to further protect consumers from unfair banking practices, including abusive overdraft fees. I am proud to work with Congresswoman Maloney and appreciate her leadership on this important issue."


The Overdraft Protection Act of 2017 would build on reforms established by Rep. Maloney’s Credit Card Accountability Responsibility and Disclosure Act, which virtually eliminated overlimit fees associated with credit cards, and has saved over $16 billion for American consumers. The legislation would extend consumer protections to checking accounts by limiting financial institutions’ ability to charge unfair and misleading overdraft fees on debit cards and other checking account transactions.

The CARD Act limited the number of overlimit fees to one per billing statement and required that they be reasonable and proportional – two protections entirely absent on debit card and other checking account overdraft fees, but that Rep. Maloney’s bill would establish.

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Matthew Kravitz at or 202-349-1859.