The CFPB's Next Target In Its War On "Junk Fees": Overdraft Fees

Earlier in January 2024, the CFPB continued its crackdown on what it decries as "junk fees," releasing a Proposed Rule to curb overdraft fees. The Proposed Rule could have a significant effect on the nature, availability, and cost of overdraft protection for deposit products, as it would significantly limit the fees that may be imposed on overdraft products and subject overdraft programs to Regulation Z and other consumer financial credit regulations.

The rule would take effect on the October 1 that occurs at least six months after the publication of the final rule in the Federal Register. The CFPB expects the Proposed Rule would become effective October 1, 2025. Comments are due by April 1, 2024.