Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, released this statement in response to the Consumer Financial Protection Bureau’s (CFPB) proposed rule to rein in excessive overdraft fees charged by the nation’s biggest financial institutions. The CFPB has long been supported by Congresswoman Waters and is the only federal agency dedicated to protecting consumers from a wide range of unfair, deceptive, and abusive products and practices provided by financial institutions, including payday lenders and big banks.

“I applaud CFPB Director Rohit Chopra and the CFPB staff for their excellent work to combat junk fees, most recently in a new proposed rule that would curb excessive overdraft fees. For far too long, our nation’s biggest banks charged consumers fees as high as $35 or $40 for briefly overdrawing their account, costing those who can least afford it billions every single year. In fact, the banking industry has raked in $280 billion the past two decades, including about $9 billion last year, from these exorbitant overdraft fees. With the CFPB’s historic proposal, the average overdraft fee would be reduced by more than half and big banks would no longer be able to profit off the backs of vulnerable consumers. Specifically, this proposed rule will help approximately 23 million households, saving them on average $150 every year. In total, this will save consumers as much as $3.5 billion or more every year.

“As the top Democrat on the House Financial Services Committee, I’ve long sounded the alarm and held big banks to task for these abusive and costly fees. This work, along with research and enforcement actions the CFPB took in recent years resulted in a number of banks reducing their overdraft fees the last few years. I am pleased that the CFPB is building on this progress to ensure more consumers are not charged excessive overdraft fees through this new rule. In fact, this proposal is consistent with legislation Committee Democrats passed when I chaired this Committee entitled, ‘the Overdraft Protection Act,’ which includes a series of consumer protections that would allow consumers to utilize overdraft programs as long as they were only charged reasonable and proportionate fees in using the service.

“Every time I talk to constituents in my district or communities across the country, one of the number one concerns I hear is how hard junk fees like overdraft fees are making it for families on already tight budgets to make ends meet. I commend the CFPB’s commitment to ensuring our financial system works better for all our nation’s consumers, and I look forward to the agency finalizing the rule in short order.”

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