On January 18th, the Consumer Financial Protection Bureau (CFPB) sent shockwaves rippling across the banking industry. Under their newly proposed rules, overdraft fees would be reduced to $3, and banks would be required to be more upfront about the fees. Currently, the average fee is $26.61. Yet the average amount of the transaction overage is significantly less than $26 and covered within 72 hrs. Simply, it’s nothing more than an incredibly high-interest loan to liberals.
If passed, the proposal could save consumers $3.5 billion a year in fees. Put forth as an effort from the CFPB and President Biden together, the goal is to eliminate so-called “junk fees” in banking. Something regulators say sends prices sky-high and provides little to no value to consumers. Lael Brainard, the head of President Biden’s National Economic Council, said that these were targeting the people who need the help the most and shamed critics for thinking it’s a service.
Lindsey Johnson, President and CEO of the Consumer Bankers Association, defended the fees in a statement of his own. “The Bureau is not only late to the party with this misguided proposal, but this one-size-fits-all approach from Washington threatens to undo years of progress while also freezing innovation and competition. If enacted, this proposal could deprive millions of Americans of a deeply valued emergency safety net while simultaneously pushing more consumers out of the banking system.”
The limitation on fees will be imposed on financial institutions with over $10 billion in assets, around 175 different institutions. Under the proposed rule from CFPB, there would be benchmarks for the fees, with $3, $6, $7, and $14 as the proposed amounts. Lowering these penalties, critics argue, will undercut banks’ bottom line, thus making banking more expensive and potentially taking away high-risk accounts.
