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CFPB releases detailed research on overdraft fees
The CFPB Wednesday issued new research on overdraft fees, revealing that credit unions have lower fees in general. The research included two data points: one on banks’ reliance on overdraft fees, and one on community banks and credit unions. CFPB noted in its report on the research that it will be "enhancing its supervisory and enforcement scrutiny of banks that are heavily dependent on overdraft fees."
During a press call following the release of the report, CFPB Director Chopra stated the bureau will take action against large financial institutions whose overdraft practices violate the law.
“The CFPB is also considering additional policy guidance outlining unlawful practices. Law-abiding institutions should not be disadvantaged by these practices,” added Chopra.
In the report, the bureau noted overdraft fees brought in $15.5 billion for financial institutions in 2019, with three banks accounting for 44 percent of the total reported that year by banks with assets over $1 billion.
Of note, the report also detailed that overdraft fee revenue declined by 26.2 percent during the coronavirus pandemic.
Relatedly, Capital One Wednesday announced it is eliminating all overdraft fees for retail banking customers. Earlier this year, Ally Bank announced that it had eliminated all overdraft fees for its customers, one week after Sen. Elizabeth Warren, D-Mass., remarked that federal regulators should be more aggressive in policing bank overdraft charges during a Senate Banking Committee hearing.
NAFCU will continue to advocate for credit unions to have access to the tools and flexibility needed to meaningfully work with members who are struggling.