Consumer Federation of California

FOR IMMEDIATE RELEASE: December 12, 2024

Contact: Robert Herrell, mail@consumercal

Sacramento, CA – Today, the Consumer Financial Protection Bureau (CFPB) issued a final rule that strengthens consumer protections for overdraft credit offered by large financial institutions.

The final overdraft rule reduces most overdraft fees from $35 per transaction to $5, a change that, according to Americans for Financial Reform (AFR), is expected to save U.S. households $5 billion annually. Data from the Department of Financial Protection and Innovation (DFPI) shows that these charges are also a persistent problem for credit unions, with some even accounting for a portion of their net income. 

“The Consumer Federation of California commends the CFPB for taking strong action to limit overdraft fees. These fees disproportionately harm young people, people of color, and working class people living paycheck to paycheck,” said Robert Herrell, Executive Director of the Consumer Federation of California. “This new CFPB rule will help protect consumers from being exploited by these harmful practices, which are some of the worst junk fees in the financial services industry. Limiting overdraft fees to $5 while giving financial institutions options in how to comply with the new rule will protect millions of consumers nationwide, particularly low and moderate income working class consumers. We applaud this rule and will fight to protect it.”

CFC and many other public-interest advocates support the rule. You can read their statements here.