What It Is

A growing share of America’s leading banks have responded to evolving demands by unveiling innovative services designed to help consumers avoid overdrafts or to provide an overdraft product with features selected by the consumer. Yet, policymakers in Washington continue to scrutinize fee-based bank services like overdraft that are valued by millions of consumers in times of need.

On January 17, 2024, the CFPB proposed an overdraft rule that would fundamentally restructure and restrict consumer overdraft services offered by banks that exceed $10 billion in assets.

Why It Matters

Whether they come from regulators or policymakers, the attacks on overdraft fail to reflect the growing number of innovative overdraft services and policies introduced over the past several years by America’s leading banks to provide consumers with even greater choice and flexibility to meet their needs within the highly competitive and well-regulated banking system.

What We Believe

Without the intervention of Washington, banks have taken proactive steps to benefit consumers while protecting those who value overdraft services, by providing real-time payment updates, grace periods, payment control, low-balance alerts, and no-fee overdraft accounts.
The monetary impact of bank-led overdraft innovation has led to roughly $5 billion a year in savings for hardworking families.
New government rules on overdraft products may hamper banks’ ability to provide this service to the consumers who have come to rely on it. This is especially relevant today given recent data indicating that 60 percent of Americans are living paycheck to paycheck.


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