ICBA: Biden Administration's Flawed Remarks on Overdraft Are Misleading and Dangerous to Community Banks and The Customers They Serve

Washington, D.C. (Oct. 26, 2022) — Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey issued this statement following the release of overdraft protection guidance from the Consumer Financial Protection Bureau (CFPB), along with related remarks from President Joe Biden.

“Earlier today, President Biden made remarks in support of the CFPB’s newly issued guidance around overdraft protection services that banks offer their customers. The remarks are harmful and misleading and are a mischaracterization of the services that community banks offer their customers. In his remarks he said that disclosed fees for certain bank services are ‘illegal.’ Such language demonstrates the administration’s lack of understanding for the many ways in which community banks serve their customers and Main Street America.

“Community banks provide a wide range of products and services that customers may select to address situations in which they’ve overdrawn their account because they lost track of their account balances, forgot about late-presented checks and automatic payments, or forgot about pending transactions. These services include overdraft programs, free ad hoc solutions, alerts about their account status, account transfers from designated accounts, small-dollar loans, lines of credit, and deposit advances. 

“Community banks offer and fully disclose these solutions and safeguards as an accommodation based on specific bank factors and knowledge of their individual customers, with many consumers continuing to seek overdraft services as a convenient protection against the domino effect of mounting fees caused by returned items, late bill payments, and merchant fees.” 

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5.8 trillion in assets, over $4.8 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.

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