Responding to a misleading statement about credit card and overdraft fees from President Joe Biden’s official Twitter account, the American Bankers Association today noted that the CFPB sets the allowable amount for credit card late fees, and like fees for overdraft protection, they are highly regulated and fully disclosed to consumers by law.
Biden in October signed an executive order directing federal agencies to crack down on what it labels junk fees. The administration reiterated that position Friday in a tweet, saying the fees “take real money out of the pockets of American families” and specifically pointing to overdraft fees and “excessive” credit card late fees as examples. “My Administration is making it clear that they’re illegal,” the White House tweeted.
Respectfully Mr. President, the CFPB sets the allowable amount for credit card late fees and they are, like overdraft fees, highly regulated and fully disclosed to consumers by law.
— American Bankers Association (@ABABankers) November 18, 2022
ABA responded with a series of tweets noting that the fees the administration cited are not only legal and regulated but fully disclosed to consumers. It also pointed to a recent ABA/Morning Consult poll that found that nine in 10 consumers said their bank’s overdraft protection was valuable, while 82% of consumers who paid an overdraft fee in the past year were glad their banks covered their overdraft payment. In addition, more than four in five consumers said their banks were transparent about disclosing fees, with nearly nine in 10 saying they were “satisfied” or “very satisfied” with their banks.
“Finally, consumers must opt-in to receive overdraft protection and can opt-out at any time,” ABA tweeted. “Likewise, the credit card market is highly competitive and Americans can pick the credit card that best meets their needs from a wide array of options.”
ABA has previously pushed back on the administration’s campaign—usually waged through the CFPB—to sensationalize highly regulated banking fees. “Available evidence, including the bureau’s own testing and reports, show that consumers understand fee disclosures, and appreciate the products and services provided even if they have to pay fees for them,” ABA President and CEO Rob Nichols said in October.