Press Releases
CFPB Saves Mainers Millions with Final Rule on Overdraft Fees
December 12, 2024
Mainers burdened by abusive overdraft fee practices will receive some relief after today’s announcement that the Consumer Financial Protection Bureau (CFPB) has finalized its overdraft rule. The rule will curb fees from $35 to $5, and save consumers up to $5 billion each year.
The CFPB’s rule will prevent big banks from charging huge junk overdraft fees that burden families with hundreds of dollars a year and even push people out of the banking system. The rule will promote straightforward, affordable forms of coverage protection.
MECEP Economic Policy Analyst Arthur Phillips says overdraft fees “are just sneaky junk fees that hurt consumers, especially those who can’t afford them. There’s a new rule that cracks down on the intentional predatory practices of big banks and puts money back where it belongs — in the pockets of Maine workers and families. It’s time to stand up to Wall Street and protect everyone from these abusive fees.”
The CFPB action to protect consumers provides clear rules of the road to ensure consistency and clarity with overdraft products offered by the largest banks and financial institutions.
Maine Equal Justice Policy Advocate Andrea Steward says, “Especially at a time of rising costs, making sure Maine people don’t face hefty, unfair overdraft fees is an essential protection. Thank you to the Consumer Financial Protection Bureau for keeping more money in the pockets of over 23 million Americans.”
The new rule could face the threat of being overturned by Congress using the Congressional Review Act (CRA), however, which allows Congress, with the president’s approval, to overturn rules using expedited procedures and a simple majority vote and limited debate.
“We know that exploitative overdraft fees hit families with low incomes hard, and people of color and Mainers in rural areas get hurt most of all,” says Maine People’s Alliance Co-Director Amy Halsted. “That’s not right, and we’re gratified that under this new rule, millions of Americans living paycheck to paycheck won’t be thrown into dire financial straits when they try to buy a $3 cup of coffee and end up owing the bank $38. We urge Sens. Susan Collins and Angus King and Reps. Jared Golden and Chellie Pingree, to support these protections, because it’s the right thing to do.”
Congress must protect this rule from industry actors. If big banks were to have their way, consumers would lose protections they need to support their day-to-day finances.
Additional information can be found here:
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Maine People’s Alliance (MPA) was founded in Lewiston in 1982 and has grown to be the largest community organization in Maine, and one of the largest in the country. MPA is a powerful grassroots network of more than 32,000 members who work together on issues that include but are not limited to climate change, toxics use reduction, health care access, affordable housing, racial justice, and immigrant rights.
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Contact: Kate Gardner, [email protected]