Most consumers who were hit by overdraft fees during the past year said they were surprised by the charges, the Consumer Financial Protection Bureau said Tuesday, in a study that appears to contradict a key argument made by financial services trade groups.
Using data from the agency’s Making Ends Meet survey, the CFPB said that only 22% of the people assessed overdraft fees had expected the fees. In fact, the agency said, 62% of those assessed fees had other sources of credit that could have been used to avoid the overdraft.
In households charged more than ten fees in the past year, 51% still had credit available on a credit card. “Our research finds that American families are paying fees they do not expect, even when they have access to cheaper forms of credit,” CFPB Director Rohit Chopra said, in releasing the report.
Overdraft fees have been a huge source of contention between the CFPB and the financial services industry. The Biden Administration has lumped many financial charges, including overdraft fees, into the category of “junk fees” it wants to eliminate. The CFPB is expected to issue a proposed rule governing the fees.
continue reading »