Congresswoman Maloney, Consumer Advocates Call on Congress to Crackdown on Predatory Overdraft Fees
NEW YORK, NY- Today, Congresswoman Carolyn B. Maloney (D-NY), senior member of the House Financial Services Committee, was joined by consumer protection advocates in calling on Congress to pass H.R. 4277, the Overdraft Protection Act of 2021. The group gathered in front of the Wells Fargo at 545 Madison. Wells Fargo is one of the many big banks that continue to charge the unfair and abusive overdraft fees that H.R. 4277 would crack down on.
The legislation, which Congresswoman Maloney introduced last week, now has 31 cosponsors. The Overdraft Protection Act of 2021 will empower consumers by cracking down on unfair overdraft fees and establishing fair and transparent practices for overdraft coverage programs. The legislation builds on the protections gained through the Congresswoman’s Credit CARD Act, which the CFPB has estimated to save consumers $16 billion in the first years of its enactment. Congresswoman Maloney has introduced a version of the Overdraft Protection Act since 2009.
“Overdraft fees are predatory and hit hardest those who can least afford them — cash-strapped hard working Americans and college students who are struggling to pay their bills, keep a roof over their heads, and food on the table,” said Congresswoman Carolyn B. Maloney. “Making matters worse, even during the pandemic – when our country and the world was in the throes of both health and economic crises, banks charged billions of dollars in overdraft fees. The Overdraft Protection Act will keep money in people’s pockets and protect consumers from unfair, deceptive, and costly overdraft fees, which cost account holders billions of dollars every year.”
“Lack of access to banks online and in-person coupled with not being able to afford a bank account because of fees like overdraft are hindering far too many New Yorkers—301,700 households—from getting banked,” said DCWP Acting Commissioner Sandra Abeles. “Over the past year, banks and financial institutions brought in an estimated $31 billion in consumer overdraft fees, often on the backs of those who can least afford overdraft, further pushing them out of the banking system. Profiting off vulnerable populations will only increase as government stimulus runs out and income volatility returns. We thank Congresswoman Maloney for introducing the Overdraft Protection Act which would protect Americans from this costly predatory product.”
"Black, Indigenous, and People of Color (BIPOC) communities and small businesses in New York City were hit hardest by COVID in sickness, death, housing instability and economic hardship. Financial institutions have an opportunity - and obligation under the Community Reinvestment Act - to support an equitable recovery, including making banking affordable and accessible. Yet, banks took in over $8.8 billion in overdraft fees nationwide during the pandemic - fees which come from people who can least afford to pay them at any time, and especially during a pandemic. The Overdraft Protection Act is a meaningful step to curb overdrafts, increase transparency, and connect New Yorkers to more affordable options,” said Jaime Weisberg with the Association for Neighborhood and Housing Development.
“Banks earn billions in profits from excessive overdraft fees at the expense of cash-strapped workers who are already struggling to provide for their families and make ends meet," said Chuck Bell, programs director for Consumer Reports. "The Overdraft Protection Act will help protect consumers by curbing deceptive marketing practices banks use to sign customers up for so-called overdraft protection programs and set important limits on how often fees can be charged."