WASHINGTON, D.C. – In tonight’s State of the Union speech, President Biden is spotlighting his Administration’s crackdown on unfair and costly junk fees generally and he is specifically highlighting the effort to curb overdraft fees. The Center for Responsible Lending (CRL) has long called for reining in these charges.
“Overdraft fees are junk fees. Despite recent progress in addressing overdraft fees, the job is far from complete. These charges wreak havoc on household budgets,” said CRL Senior Policy Counsel Nadine Chabrier. “We applaud President Biden for highlighting their harm. The Consumer Financial Protection Bureau took a big step by banning surprise overdraft fees. We are encouraged that the consumer bureau announced it will take additional steps, and we urge the bureau to place strong limits on the size and frequency of these fees.”
A recent Bankrate survey of checking account policies in large U.S. markets found 96% of checking accounts are still subject to overdraft fees with the average overdraft fee around $30. This amount bears no relation to the minimal cost to financial institutions of covering the overdraft.
Joining with consumer group partners, CRL last year submitted a comment letter to the consumer bureau urging it to protect consumers from a range of junk fees.