James Urges House to Block Overdraft Fee Rollback

New York Attorney General Letitia James is leading a charge against the proposed reversal of Consumer Financial Protection Bureau (CFPB) overdraft fee limits, urging members of the U.S. House of Representatives to vote against the resolution.

In an effort to safeguard consumers from excessive banking fees, James and 22 other state attorneys general have penned a letter to House leadership, opposing the overturning of the CFPB’s 2024 rule that limits overdraft charges by big banks. The rule is designed to prevent big banks from imposing exorbitant fees on customers who accidentally overdraw their accounts.

‘Overturning this rule will only do one thing: help big banks profit at your expense,’ James sternly warned. ‘Accidentally overdrawing your checking account by a few dollars shouldn’t result in an outrageous fee. The CFPB took action to protect consumers from outrageous overdraft fees, and Congress should do the same.’

The resolution, House Joint Resolution 59, seeks to nullify the 2024 CFPB rule that applies only to banks with more than $10 billion in assets. Despite the Senate’s narrow approval of a similar resolution (52-48), James and her allies are hoping the House will not follow suit.

Attorney General James highlighted the financial burden these fees place on consumers, noting that the average overdraft fee is about $35, significantly more than the actual overdraft amount. These fees contribute to banks’ revenues, totaling approximately $5.8 billion in 2023. Under the CFPB’s rule, such fees would be treated as interest on a loan, with an annual interest rate equivalent to 16,000 percent for a typical fee of $35 on an average overdraft of $26.

James and her coalition also pointed out that many banks have eliminated overdraft fees without compromising the convenience of overdraft protection. The letter was signed by attorneys general from Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia. The Hawaii Office of Consumer Protection also joined the coalition.

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