As President Donald Trump attempts to shut down the Consumer Financial Protection Bureau, several senators are pressing more than 20 credit unions on their overdraft and non-sufficient funds fee policies.
U.S. Sens. Elizabeth Warren (D-MA), ranking member of the Senate Banking, Housing, and Urban Affairs Committee; Cory Booker (D-NJ); and Richard Blumenthal (D-CT) wrote letters to 21 credit unions asking for information on their overdraft and NSF fee policies. The move comes after the Trump Administration, including the National Credit Union Administration (NCUA), took steps to stop publishing overdraft and NSF data for individual credit unions, and repealed the CFPB’s rule limiting most overdraft fees to $5.
“Overdraft and non-sufficient fund (NSF) fees are ‘one of the most common exploitative mechanisms big banks use to target the poor,’” the Democratic Senators wrote. “The CFPB found nearly twice as many consumers with incomes between $35,001 and $65,000 were charged overdraft and NSF fees (35%), versus consumers with incomes between $100,001 and $175,000 (18%). Banks are not the only ones who charge overdraft fees; credit unions––despite being created to serve individuals of modest means––also collect significant overdraft and NSF fees.”
The senators said Trump Administration policies had raised costs on consumers, and that doing so at a time when consumers are already struggling to pay bills only damages consumers more.
“Charging excessive overdraft fees when almost 40 percent of American households have less than $400 to cover an emergency expense, prices for food, utilities, and other essential items are rapidly rising, and Trump’s chaotic, half-baked policies are wreaking havoc on the economy is inexcusable,” the lawmakers wrote.