At long last, the Consumer Financial Protection Bureau has issued their finalized proposal on capping exploitative overdraft fees, which in some cases have been set as high as $39 per transaction.^[1]

This proposal is part of CFPB’s ongoing effort to tackle junk fees in the banking and finance industries -- and it’s a very significant step towards just and equitable banking, since the group of people most impacted by overdraft fees are low-income, Black, and brown families.

The new rules will apply to banks with more than $10 billion in assets -- which covers approximately the 175 largest banks in the country -- and go a long way towards shutting down what CFPB Director Rohit Chopra described as “a massive junk fee harvesting machine.”

Specifically, when a bank covers an insufficient funds transaction, they are granting you a short-term loan -- and the CFPB’s proposal will bring the fees charged on that transaction into line with longstanding consumer protections on loans as specified in the Truth in Lending Act.

The proposed rule would allow financial institutions to charge a fee in line with their demonstrated costs OR in accordance with an established benchmark; the agency has proposed benchmarks of $3, $6, $7, or $14, and is seeking comment on the appropriate amount.

The CFPB estimates that this rule will save consumers $3.5 billion or more in fees every year -- so now is the time for all of us to speak out and push this proposal over the finish line. The banking industry is already spending a lot of money and deploying armies of lobbyists to stop this proposal -- we can’t let that happen.

Click 'START WRITING' to submit your official public comment in support of capping fees at $3 and this long-overdue crackdown on abusive and exploitative overdraft fees now.

^{[1] CFPB Proposes Rule to Close Bank Overdraft Loophole that Costs Americans Billions Each Year in Junk Fees}