New York Attorney General Letitia James, along with 24 other attorneys general, wrote a letter to CFPB Director Kathy Kraninger stating opposition to any rollback or change of overdraft fee rules, claiming it will hurt consumers.
“If the CFPB rolls back this rule, it would put hard-working people in harm’s way by allowing banks to charge more overdraft fees, all in the name of corporate greed,” said James in a statement. “Consumers across New York deserve the chance to make informed decisions about their finances, so I urge the CFPB to give them that opportunity and create a more efficient and fair marketplace.”
The rule currently in place permits financial institutions to charge fees to consumers for overdraft services on ATM and one-time debit transactions only after consumers have been provided with information about those services and fees in a notice, and only after those consumers have made the affirmative choice to opt in to the services. Currently, the CFPB is reviewing the rule under the Regulatory Flexibility Act to determine: the nature and extent of the economic impacts of the rule as a whole and of its major components on small entities; whether and how the bureau could reduce the costs of the rule on small entities; and any other information relevant to the bureau’s review of the rule.
James and the other state attorneys argued that the rule has saved consumers billions of dollars in fees. They also said they had no reason to believe the rule placed any additional economic burden or cost on small financial institutions, and that compliance has been straightforward.
The attorneys general—all Democrats—concluded by recommending the CFPB consider expanding the rule to “checking and ACH transactions and to require that fees be proportionate to the amounts banks pay to cover overdraft transactions.”
To view the letter, click here.