As 2022 begins, several banks have announced a move to reduce or eliminate overdraft fees. NPR reports one reason for the move away from these fees is related to federal regulators taking a tougher stance on the fees that banks charge their customers. Overdraft and non-sufficient funds fees account for a significant amount of fee revenues generated by banks. The Consumer Financial Protection Bureau (CFPB) revealed data showing banks charged consumers over $15 billion in overdraft and non-sufficient funds fees in 2019. And 80% of the overdraft and non-sufficient funds fees were paid by 9% of customers who on average were assessed 10 overdrafts per year.
However, litigation is another reason banks have reconsidered overdraft and non-sufficient funds fees. Many banks and credit unions have faced class action lawsuits over improperly charged overdraft and non-sufficient funds fees. Cohen & Malad, LLP attorneys have litigated hundreds of improper fee lawsuits and achieved dozens of class action settlements which have returned tens of millions of dollars to bank and credit union customers.
Learn more about bank fee lawsuits here.