A rule proposed Wednesday by the Consumer Financial Protection Bureau could reduce — to between $3 and $14 — the overdraft fees charged by banks with more than $10 billion in assets.
Under the proposed rule, banks would classify overdraft charges as extensions of credit, making them subject to the same consumer protections as credit cards under the Truth in Lending Act. That would force banks to disclose an annual percentage rate for such charges. Overdraft services — at a charge of roughly $35 per instance — now equate to an APR of about 16,000%, CFPB Director Rohit Chopra told reporters on a call Tuesday.
