Bank watchdog to crack down on bank overdraft fees

TODAY

ICYMI: US Government to Crack Down on Bank Overdraft Fees

In case you missed it, the government's bank watchdog plans to crack down on what it describes as banks' "deep dependence" on overdraft fees to generate revenue. Previous research from the agency—the Consumer Financial Protection Bureau (CFPB)—found these fees have also disproportionately impacted what they described as "low-income" households.

Banks raked in more than $15 billion in 2019 from overdraft and insufficient fund fees, according to new research from the CFPB. Three banks—JPMorgan Chase, Bank of America, and Wells Fargo—accounted for nearly half of all overdraft fees charged.

In a statement, CFPB Director Rohit Chopra pledged that the agency would "take meaningful action."

The regulatory warning came on the same day that Capital One bank announced it would abandon the use of the fees altogether, a move made by Ally Bank in June.

- Kristin

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