Bank groups sue the Consumer Financial Protection Bureau over a proposed cap on overdraft fees

Source: Associated Press, via Yahoo! Finance

Associated Press Finance
Bank groups sue the Consumer Financial Protection Bureau over a proposed cap on overdraft fees

MICHELLE CHAPMAN
Fri, December 13, 2024 at 9:59 AM EST 2 min read

Some banks and banking trade groups are suing the Consumer Financial Protection Bureau over a finalized rule that limits overdraft fees banks can charge. ... The rule is part of President Joe Biden administration's campaign to reduce junk fees that hit consumers on everyday purchases, including banking services.

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The Consumer Bankers Association filed the lawsuit along with the American Bankers Association, America’s Credit Unions and Mississippi Bankers Association and other banks. The group claims that the CFPB is exceeding its regulatory authority with the new rule.

“Research shows that overdraft services provide much-needed liquidity during a short-term budget shortfall so consumers can put food on the table, keep the lights on, and make other important payments on time," CBA President and CEO Lindsey Johnson said in a statement. "Without overdraft services, consumers on the margins are more likely to turn toward worse, less-regulated non-banking services to fill the gap.”

The complaint was filed Thursday in the U.S. District Court for the Southern District of Mississippi, Northern Division. CBA and its co-plaintiffs are also seeking a preliminary injunction barring the CFPB from implementing the new rule until the court makes a final decision on the merits of the case.

Read more: https://finance.yahoo.com/news/bank-groups-sue-consumer-financial-145912765.html