LANSING – Michigan Attorney General Dana Nessel joined 24 attorneys general earlier this month in a comment letter saying she opposes any action by the Consumer Financial Protection Bureau (CFBP) to limit or withdraw its Overdraft Rule. As written, the Rule prohibits financial institutions from automatically enrolling customers in costly overdraft services.
The 2010 Rule ensures customers have an opportunity to make more informed decisions on whether to opt in to overdraft services for ATM and signature debit transactions by requiring financial institutions to provide details on its overdraft services, including applicable fees that often exceed the total amount customers withdraw.
The CFPB’s data shows that only about 16 percent of consumers opt into services under the Rule. As a result, the Rule has benefited millions of Americans, significantly reducing the total number of overdraft fees.
“To even consider amending or removing the Overdraft Rule – which is specifically designed to provide consumers with more information to make better financial decisions – shows precisely whose side our federal administration is on,” Nessel said. “It is abhorrent to me that at every turn the Trump administration continues to side with Wall Street over the American people.”
As the chief consumer protection officers of their respective states, the attorneys general understand the importance of encouraging and facilitating fully informed consumer choice about the costs, benefits and risks of financial products. For nearly 10 years, the Overdraft Rule has enabled consumers to make more and better-informed choices about overdraft services.
In the letter, the attorneys general also encourage expanding the Rule to cover other transactions, including checks and automated clearinghouse (ACH) transactions, and requiring all overdraft fees be proportional to the amount paid by a bank to cover the overdrawn transaction.
Nessel co-signed the letter with the attorneys general of California, Colorado, Delaware, the District of Columbia, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington, as well as the Executive Director of the Hawaii Office of Consumer Protection.
A copy of the letter can be read here.