Impact of Overdraft Fees on Consumers

Overdraft fees significantly burden consumers, particularly those living paycheck to paycheck. Major banks charge exorbitant fees, often $35, for minor overdrafts, which can result in an annual financial hit of about $225 for impacted households. The Consumer Financial Protection Bureau (CFPB) identified that 79% of overdraft fees are levied against only 9% of accounts, showing a clear exploitation of vulnerable populations. This practice has been labeled as a collective $5 billion annual ripoff within the banking system.