Mercer Times

Attorney General Matthew J. Platkin has expressed opposition to a resolution that would allow large banks to impose high overdraft fees on customers. In a joint letter with multiple states, Platkin urged the U.S. House of Representatives to reject a proposition that could overturn a rule set by the Consumer Financial Protection Bureau (CFPB) in December 2024. This rule seeks to limit the overdraft fees large banks can charge to $5 or equivalent to the banks' actual costs in providing overdraft protection.

Currently, banks with overdraft protection services often charge customers about $35 for each time their account is overdrafted, typically for amounts less than $26 and repaid within three days. Platkin warned that if the House follows the Senate's recent passing of a resolution against this rule, banks will continue to apply what he describes as "predatory charges." In 2023 alone, banks accrued $5.8 billion in revenue from these fees.

"New Jerseyans, like the rest of Americans, are already facing rising prices and an uncertain economic future due to the actions of the federal administration over the past 11 weeks," Platkin stated. He questioned why representatives would side with large banks over consumers. Cari Fais, Director of the Division of Consumer Affairs, reiterated concerns about these fees, which she referred to as "junk fees" that act as high-interest loans beyond actual bank expenses.

This move is consistent with New Jersey's ongoing efforts to protect consumers and support a strong CFPB. The state has previously opposed initiatives by the Trump Administration and Elon Musk, aiming to weaken the CFPB, and supported increased protections for users of digital payment services. Other states backing the current initiative include Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia. Hawaii's Office of Consumer Protection also joined the coalition.