ICBA Statement on White House Comments on Overdraft, Credit Card Services

Washington, D.C. (March 7, 2024) — Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey released the following statement on today’s White House comments on overdraft and credit card services ahead of tonight’s State of the Union address.

“ICBA and the nation’s community banks continue to reject President Biden’s gross mischaracterization of legitimate overdraft protection services and credit card fees for late payments as ‘junk fees.’ Such intentionally reckless language misrepresents the overdraft protection services that banks offer their customers and how community banks meet the credit card needs of their customers.

“ICBA remains concerned that the CFPB’s proposed rulemaking on overdraft services and final rule on credit card fees for late payments will have unintended consequences on all institutions. These restrictions would also have a negative ripple effect on customers and businesses that rely on overdraft services by causing them to experience the harsh realities of rejected payments.

"The rejection of a payment for a life-saving medical need, or the rejection of payroll payments for a small business’ employees, are just two examples of the significant impact these punitive policies would have. Additionally, the administration's ill-advised policy on credit card late fees sends the wrong message that punctual credit card payments are not a significant priority, which could result in consumers making more late payments and incurring additional interest charges in the long term.

“Community banks provide a wide range of products and services in a competitive marketplace that customers may select to address situations in which they’ve overdrawn their account, including overdraft programs, free ad hoc solutions, alerts about their account status, account transfers, and more. Community banks also offer credit cards under contracts that consumers voluntarily enter into and that feature clearly disclosed late fees that deter late payments, help offset issuer costs, and represent a small portion of customers’ credit card costs.

“ICBA and the nation’s community bankers reject the intentional mischaracterization of legally disclosed fees for services that consumers seek. We look forward to working with the CFPB to minimize the negative impact of its policies on local communities and consumers, and we continue urging the Biden administration to avoid further mischaracterizations.”

About ICBA

The Independent Community Bankers of America® has one mission: to create and promote an environment where community banks flourish. We power the potential of the nation’s community banks through effective advocacy, education, and innovation.

As local and trusted sources of credit, America’s community banks leverage their relationship-based business model and innovative offerings to channel deposits into the neighborhoods they serve, creating jobs, fostering economic prosperity, and fueling their customers’ financial goals and dreams. For more information, visit ICBA’s website at icba.org.