Consumer Financial Protection Bureau seeks to curb abusive overdraft and late fees

(Other Words) – Poverty is expensive in this country. Few things illustrate that truism like overdraft charges and late fees, which are often little more than outrageous penalties for not having enough money. But there are plans in the works at the Consumer Financial Protection Bureau to rein in these abusive practices. Overdraft fees occur when a customer attempts to withdraw more money from their account than is available, but the banking institution covers the transaction – for a fee. The CFPB is proposing rules to close loopholes in rules on overdraft fees by establishing a benchmark that banks cannot exceed. Related Stories Over a quarter of Americans live in a household that was charged an overdraft fee in the past year, but especially harmed are those who have the least to begin with. These overdraft fees are structured to prey on consumers already in a financially precarious position. The impact skews toward low-income households and people of color. Young people are also more likely to be affected. When banks hit people with an overdraft fee, they end up further in the hole – to the benefit of the bank. “Overdraft fees are not so much a useful service as...