A Coalition of 18 Attorney Generals Call for Overdraft Fee Elimination

On April 4, 2022, a coalition of 18 state attorneys general led by New York Attorney General Letitia James (collectively, “AGs”) called on JPMorgan Chase, Bank of America, U.S. Bank, and Wells Fargo (collectively, the “outlying banks”) executives “to eliminate all overdraft fees on consumer bank accounts.”  

The AGs applauded the actions of Citigroup Inc. (“Citi”), which announced on February 24, 2022, that it will eliminate overdraft fees, returned item fees and overdraft protection fees by Summer of 2022, and Capital One, which subsequently announced that it would eliminate all overdraft and non-sufficient funds fees for all consumer banking customers. The AGs stated Citi's and Capital One's efforts were “vital steps toward creating a fairer and more inclusive consumer financial system[,]” and called for the outlying banks to follow suit and “take swift action  to eliminate harmful junk fees.”

The AGs highlighted the harmful impact of such fees and the clear intent of the Consumer Finance Protection Bureau (“CFPB”) to begin taking regulatory action pursuant to the elimination or mitigation of these “junk fees” as a basis for their call to “consider the enormous societal costs of overdraft, overdraft protection and similar fees, and to commit immediately to the elimination of such practices on the same timetable as Citi.”

Although the list of state attorneys who joined together in pursuit of the objective to eliminate "junk fees" did not include Texas, financial institutions around the world should consider the implications of the AG coalition. Considering the clear effort across many states and the regulatory agencies' goal to eliminate consumer-based fees, financial institutions should consider whether or not they intend to maintain their current fee-assessment policies or if they will join institutions like Citi and Capital One in their elimination.