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WASHINGTON, D.C. – Predictably, powerful Republican House Financial Services Committee Chairman Patrick McHenry (R-NC) and one of his top lieutenants, Rep. Andy Barr (R-KY), are publicly smearing the newly finalized rule from the Consumer Financial Protection Bureau limiting overdraft fees charged by banking institutions and credit unions to a range of $3 to $14, a move expected to save consumers $3.5 billion a year. McHenry and Barr conveniently make no mention that they have together taken over a million from just the 10 largest banks still charging overdraft fees, an Accountable.US analysis found.

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Reps. McHenry and Barr are bankrupt of credibility when they claim to care about consumers. Their hostility against the Biden Administration’s crackdown on hidden overdraft fees is all about protecting profits of their megabank donors at the expense of everyday families."

Accountable.US’ Liz Zelnick.

“These powerful House Republicans are so indebted to CEOs that abuse the overdraft practice that they’re willing to tell hard-working Americans they should be grateful for corporate price-gouging like a surprise $42 charge on a gallon of milk. Reps. McHenry and Barr should at least be honest about why they’re against lowering costs for millions of families: they’d rather raise more money from industry lobbyists.”

Inconvenient Facts for House Republicans in the Pocket of Banks That Abuse Junk Fees: 

  • Consumers Are Fed Up With Surprise Overdraft Fees: A recent national survey finding consumers continue to suffer from excessive overdraft fees. The survey found over a quarter of consumers reporting being charged an overdraft or NSF fee within the past year. Among consumers in households charged an overdraft fee in the past year, 43% were surprised by their most recent account overdraft and only 22% expected it. And among households that frequently incurred overdraft/NSF fees, 81% reported difficulty paying a bill at least once in the past year. Meanwhile, many consumers who were charged overdraft fees had access to a cheaper alternative, such as available credit on a credit card. And a recent national survey commissioned by Accountable.US found Americans overwhelmingly believe the Biden crackdown on price gouging by banning junk fees will lower their costs.
  • JPMorgan Reported Industry Record Profits Of Nearly $50 Billion After Topping Megabanks in Use Of Overdraft Fees: Last week, JPMorgan Chase reported its most profitable year on record with $49.6 billion in profits, “the most ever in the history of the American banking industry.” A recent analysis from government watchdog Accountable.US found that JPMorgan Chase collected $839 million in overdraft fees between January and September 2023, making them among the financial institutions most reliant on the practice. Overall, Accountable.US found the 10 largest banks still using overdraft fees raked in over $2.34 billion from the practice in 2023 as of September 2023.
  • Banks Don’t Need Overdraft Fees to Be Profitable: Citi CEO Jane Fraser told lawmakers that her bank was still profitable and eliminating overdraft fees didn’t “upend” their business model, adding “We work hard to protect our customers and make sure they don’t fall into overdraft.” Ally Bank—the largest digital bank in the U.S.—also eliminated the erroneous fees in June 2021, with Ally CEO Jeffrey Brown saying they were “a pain point for many consumers” adding “it [was] time to end them.” 

 

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