Sens. Booker, Brown Take Aim at Overdraft Fees
Last week, U.S. Senators Cory Booker (D-N.J.) and Sherrod Brown (D-Ohio) introduced legislation targeting what they see as “exploitative overdraft fees that banks charge consumers when they make a purchase or pay a bill but don’t have sufficient funds in their account.” The bill, dubbed the “Stop Overdraft Profiteering Act of 2018,” would ban overdraft fees on debit card transactions and ATM withdrawals, and limit fees placed for checks and recurring payments.
“Overdraft fees are a tax on paychecks already stretched thin,” Brown said in a statement. “This bill keeps hardworking Americans’ money in their pockets and stops big banks from slapping big fees on customers for small overdraft amounts.”
“For millions of hardworking Americans, every day is a struggle – they find themselves one late check or unexpected expense away from financial free fall,” said Booker. “Overdraft fees fall on those least likely to be able to afford them – individuals for whom a $35 overdraft charge could push them over the brink into financial ruin.”
The bill would also mandate that banks post transactions in a way that minimizes overdraft and nonsufficient fund fees.
When it comes to overdraft fees, Sen. Booker has been aggressive in looking to address the practice. Last year, he sent a letter to the CEOs of 13 banks requesting information on their current overdraft practices. Earlier this year, his office released a report outlining how banks use the fees. And last month, Booker – joined by 14 other Senators – sent a letter to the CFPB questioning its plan to no longer pursue regulatory action on overdraft fees.