Coalition Moves to Protect Consumers from Costly Bank Overdraft Fees 

February 5, 2025 — Press Release

Groups Seek to Intervene to Defend Rule Designed to Keep Money in Consumers’ Pockets as the Work of the Agency is Frozen

As the Trump-Vance Administration takes over the Consumer Financial Protection Bureau (CFPB) and begins with a stop work order, a broad coalition is taking legal action to defend a CFPB rule that would help to keep money in consumers’ pockets. 

Today, MyPath and Mississippi Center for Justice filed a motion in U.S. District Court for the Southern District of Mississippi, Southern Division, seeking to defend the CFPB’s Overdraft Rule from a challenge brought by a group of financial institutions and groups that lobby on their behalf. The challenge, Mississippi Bankers Association et al v. Consumer Financial Protection Bureau et al, seeks to stop a CFPB rule that would help to keep money in consumers’ pockets. The coalition seeking to intervene in the case to defend the law is represented by Democracy Forward, the Mississippi Center for Justice and the National Consumer Law Center. 

The Overdraft Rule was announced by the CFPB in December of 2024 and a challenge seeking to preemptively block the rule from being enforced was filed before the rule was formally published. While the rule had been defended against this challenge by the CFPB, President Trump’s advisors have stated that the CFPB should be shut down entirely, and that the Overdraft Rule, in particular, should be rescinded. Understanding the hostility of the new administration, MyPath and the Mississippi Center for Justice are now asking the court to allow them to intervene in the case to defend the rule to protect consumers’ pocketbooks. 

“The CFPB’s overdraft fee rule returns $5 billion to consumer pocketbooks, saving households $225 a year or more, and it is critical that the rule be vigorously defended against challenges by banks trying to save their junk fees,” said Carla Sanchez-Adams, senior attorney at the National Consumer Law Center. “The overdraft fee rule protects families who live paycheck to paycheck and need every dollar to meet their basic needs.”

“MyPath is proud to step in to ensure this rule gets a fair shot in court. Our youth participants, young adults pursuing their education, employment, and entrepreneurship dreams in the face of economic barriers, will benefit from the reduction in overdraft fees and the much-needed transparency around overdraft itself set forth in the rule. And it can help build trust between banks and their customers, which is what young people– and all Americans– want in their banking relationships,” said Margaret Libby, Founder & CEO of MyPath. 

“The Consumer Financial Protection Bureau’s Overdraft Rule protects the citizens of Mississippi that we serve every day. Many of these individuals and families are vulnerable, low-income consumers who have faced excessive and exploitative fees from financial institutions for a long time,” said Kimberly Jones Merchant, President and CEO of the Mississippi Center for Justice . “These unfair charges especially impact those trying to make ends meet. We refuse to let predatory banking practices go unchallenged. The Mississippi Center for Justice stands firmly with our partners in defending this vital rule. Our mission is to protect Mississippians from unjust financial burdens.”

“The Consumer Financial Protection Bureau’s protections to ensure that consumers have the information they need and are protected from unnecessary fees is critical. Yet, the Trump-Vance administration has shown hostility for these types of protections for Americans,” said Skye Perryman, President and CEO of Democracy Forward. “We are very honored to work with a brave coalition of groups like MyPath and the Mississippi Center for Justice to defend the Overdraft Rule if the government will not.”

For more information about the case and to read the memorandum in support of the intervention, please click here.