Rep. Maloney Calls for CFPB to Regulate Credit Card Market and End Predatory Overdraft Fees

Oct 27, 2021
Press Release

WASHINGTON, DC — At today’s Financial Services Committee hearing titled “Bringing Consumer Protection Back: A Semi-Annual Review of the Consumer Financial Protection Bureau,” Congresswoman Carolyn B. Maloney (D-NY), senior member of the committee, questioned Consumer Financial Protection Bureau Director Rohit Chopra on issues in today’s credit card marketplace, and pushed the CFPB to end predatory overdraft fees.

 

Congresswoman Maloney is the author of the Credit CARD Act of 2009, which ended the most unfair and abusive practices of the credit card industry and leveled the playing field between cardholders and credit card companies. She is also the author of the Overdraft Protection Act of 2021, which will crack down on predatory overdraft fees and establish fair and transparent practices for overdraft coverage programs.

 

Congresswoman Maloney began by asking CFPB Director Chopra, “Will you reinstitute CFPB’s past practice of reporting the cumulative benefits for consumers of the CARD Act in future reports as the Obama Administration did?”

 

Director Chopra responded, “I fully intend to make sure we report to Congress appropriately on that.”

 

Congresswoman Maloney then asked Director Chopra, “Are there any other areas of particular concern for you in today’s credit card market that you believe merits further consideration by the CFPB or by Congress?”

 

Director Chopra answered, “I think if you look at many of the consumer complaints and you look at some other market data, obviously people are concerned about whether assessments of certain types of fees have been appropriate, whether they’re actually due to system errors. I think in the credit card industry writ large, I am concerned that not enough Americans are taking advantage of moving their balances or finding lower rates. Many Americans qualify for lower rates than they might be paying. And a competitive and fair market would mean that those consumers could move or find lower rates and that could save them a lot of money. I believe in 2019, Congresswoman, Americans paid I think $90 or $100 billion in credit card interest in fees, and obviously a more competitive market would be to the benefit of all issuers and consumers as well.”

 

Turning to overdraft fees, Congresswoman Maloney outlined the harms of today’s overdraft practices and the benefits of her legislation, the Overdraft Protection Act, to consumers. She then asked, “Director Chopra, what, under your leadership, will the CFPB do to address these abusive, unfair practices and this profoundly influential driver of racial inequity?”

 

Director Chopra replied, “Congresswoman as I understand the data, overdraft fees are actually disproportionately paid by a relatively small sliver of borrowers. Some of those account holders are paying a very high amount of overdraft fees in a single calendar year. We will obviously enforce the law as written as well as implement any implementing regulations that have been promulgated by the Fed or the CFPB. And we will closely monitor this market to make sure it is free of unfair, deceptive practices.”

 

You can watch the full exchange here.

 

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