Kate Cohen
ConnPIRG Education Fund
HARTFORD, CT – An analysis of new government data by ConnPIRG Education Fund found that big banks made $8.4 Billion in overdraft fee income in the first three quarters of 2016, up nearly 4% from the same period in 2015. Since the beginning of 2015, all banks greater than $1 Billion in assets have been required to report fee data quarterly and are included in the study.
“Banks that relied most heavily on overdraft revenue had more complaints to the Consumer Financial Protection Bureau in the complaint category “account funds being low,” said Kate Cohen, state director with ConnPIRG. “It’s clear that we need to protect a strong CFPB to make sure banks are following the law.”
Key highlights of “Big Banks, Big Overdraft Fees,” co-written with The Frontier Group, include the following:
“It’s clear from these findings that the CFPB works, and it works for consumers,” added Cohen. “Congress should reject efforts from banks, payday lenders and debt collectors to weaken the CFPB.”
“Consumers are wasting billions of dollars on needless overdraft charges—giveaways to big banks that can and should be stopped,” said U.S. Senator Richard Blumenthal. “CFPB must act now to limit overdraft fees above and beyond the actual costs to banks. I thank ConnPIRG for helping to publicize this important concern. Consumer watchdogs are needed now more than ever.”
In 2010, regulators announced new Overdraft Protection Rules. The rules prohibit banks from allowing overdrafts on debit and ATM transactions unless a consumer has affirmatively opted-in or said “Yes.” The CFPB has expressed concerns over marketing of overdraft protection products and continues to study the problem. Consumers can still face overdrafts on checks or automated recurring payments.
“Many consumers can cut their exposure to overdraft fees by opting out of “standard overdraft protection,” which allows large overdrafts even on small transactions with debit cards,” added Cohen. “Would you rather have your card declined at a coffee shop or pay a $35 fee for a $3 latte?” Check out ConnPIRG’s overdraft fee tips at http://connpirg.org/blogs/blog/usp/you-might-not-know-about-overdraft-fees.
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ConnPIRG is a non-profit, non-partisan public interest advocacy organizations that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society. On the web at ConnPIRG.org.
Frontier Group provides information and ideas to help citizens build a cleaner, healthier, fairer and more democratic America. We address issues that will define our nation’s course in the 21st century – from fracking to solar energy, global warming to transportation, clean water to clean elections. For more information about Frontier Group, please visit www.frontiergroup.org.
This is the 8th report in a series by PIRG and the Frontier Group based on downloaded data from the CFPB’s Public Consumer Complaint Database. Previous reports are available here. This report also uses “call report” data on fee revenue collected by bank regulators organized as the Federal Financial Institutions Examination Council (FFIEC).