NCL Applauds CFPB Final Rule on Overdraft Fees

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December 12, 2024:  NCL Applauds CFPB Final Rule on Overdraft Fees

Contact: National Consumers League – Lisa McDonald, lisam@nclnet.org, 202-207-2829

Washington, DC— Consumers across the U.S. burdened by abusive overdraft fee practices will receive some relief after today’s announcement that the Consumer Financial Protection Bureau (CFPB) has finalized its overdraft rule. The rule will curb many large banks’ fees from $35 to approximately $5, and is estimated to save American consumers up to $5 billion annually.

The National Consumer League (NCL) applauds the CFPB’s rule as it will prevent big banks and credit unions with more than $10 billion in assets from charging junk overdraft fees that burden families with hundreds of dollars a year in unfair charges and push marginalized communities out of the banking system. The rule will push banks to offer straightforward, affordable forms of coverage protection instead.

“Predatory overdraft fees disproportionately harm communities of color and low-income families, but no one is immune to the damaging effects of these exploitative practices,” says Sally Greenberg NCL’s CEO. “By finalizing its overdraft rule, the CFPB is standing up to big banks, protecting American consumers and their hard-earned money.”

The CFPB’s action to protect consumers provides clear rules of the road to ensure consistency and clarity regarding overdraft products. The final rule requires financial institutions with over $10 billion in assets to choose from one of three options for overdraft fees:

  1. Cap fees at $5 to cover the actual costs to oversee an overdraft program.
  2. Charge fees based on actual costs and losses as a service, rather than a profit center.
  3. Treat overdraft coverage like loans, with disclosures, opt-in options, and payment flexibility.

Read the comments submitted by NCL and 143 organizations submitted in support of this rule here.

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NCL welcomes CFPB final rule enabling supervision of payment apps

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Media contact: National Consumers League – Lisa McDonald, lisam@nclnet.org, 202-207-2829

WASHINGTON, DC–Today, the Consumer Financial Protection Bureau finalized its larger participant rulemaking, allowing the Bureau to better ensure that payment app companies are complying with federal consumer protection law. As the use of payment apps has exploded over the past decade, CFPB oversight is critical to ensuring that consumers using these apps are receiving the full care and protections they are legally entitled to, including safeguards around payment errors, peer-to-peer fraud, and corporate surveillance.  

“As our financial system evolves, it’s important that regulators keep up. Director Chopra and CFPB staff have done invaluable work over the past three years to ensure that payment facilitators follow the law, even as the technology advances,” said NCL Vice President of Public Policy, Telecommunications, and Fraud John Breyault. “The final rule announced today will help better protect the millions of consumers who use digital wallets and payment apps every day.” 

Additional reading:

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About the National Consumers League (NCL) 

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

NCL applauds Biden Administration actions to minimize unfair charges, protect producers from retaliation

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March 5, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – Today, the White House Competition Council announced new actions to lower costs for consumers and promote market health. The Consumer Financial Protection Bureau (CFPB) finalized a rule to save consumers $10 billion a year by capping credit card late fees to an average of $8. The Federal Communications Commission (FCC) is initiating a ban on bulk billing, a practice where landlords or service providers charge all tenants in a building for a particular service—even for residents who do not choose that service. Lastly, the Department of Agriculture (USDA) is implementing protections for farmers and ranchers from retaliatory practices used by the industry’s dominant firms.

The following statement is attributable to NCL Chief Executive Officer Sally Greenberg:

“Under President Biden’s leadership, consumer protection agencies are doing critical work to guard the marketplace against industry misconduct. As more industry sectors have become increasingly consolidated, today’s actions are necessary to ensure that consumers aren’t ripped off and to protect producers from illegal retaliation and discrimination. When businesses concentrate market power and employ unfair practices to maintain that dominance, new legal safeguards and structural reform become necessary to protect the public from further harm. Today’s announcements are an important piece of this effort to maintain healthy marketplaces that benefit consumers and workers.”

The National Consumers League has worked to protect both consumers and workers from consolidated corporate power since 1899. From advocating against banking fees that disproportionately affect marginalized communities to fighting for transparency in telecom billing, NCL continues to provide a voice for the public interest.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL supports CFPB’s proposal to remove medical debt from credit reports

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September 28, 2023

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – The National Consumers League (NCL) supports the bold proposal from the Consumer Financial Protection Bureau (CFPB) to remove medical bills from Americans’ credit reports.

According to a CFPB report released in March 2022, $88 billion of outstanding medical bills are currently in collections—affecting one in five Americans. Medical debt constitutes a majority (57 percent) of all collections on credit reports.

“This proposal will help families financially recover from medical crises and prevent debt collectors from coercing people into paying bills they may not even owe,” said Sally Greenberg, CEO of the NCL. “It will ensure that creditors are not relying on data that is often plagued with inaccuracies and mistakes.”

Approximately 20 percent of Americans report having medical debt, according to the March 2022 report, but previous research by the CFPB shows that consumers with medical debt generally paid back their loans or bills at the same rate as consumers with higher credit scores.

If finalized, the CFPB proposal will do the following:

  • Remove medical bills from consumers’ credit reports: Consumer reporting companies would be prohibited from including medical debts and collection information on consumer reports that creditors use in making underwriting decisions.
  • Stop creditors from relying on medical bills for underwriting decisions: The proposal would narrow the 2005 exception and prohibit creditors from using medical collections information when evaluating borrowers’ credit applications.
  • Stop coercive collection practices: As unpaid medical bills would no longer appear on consumers’ credit reports used by creditors in making underwriting decisions, debt collectors would no longer be able to use the credit reporting system as leverage to pressure consumers into paying questionable debts.

Greenberg added, “Medical debt is not caused by profligate spending. Americans incur this debt because of emergencies or because they are uninsured or underinsured. We believe that this proposed rule will allow consumers weighed down by medical debt through no fault of their own and help them to restore their access to sustainable credit.”

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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.