At Hearings, Watch Out For This Deceptive Rhetoric Defending The Predatory Practice

This week, CEOs from the nation’s largest banks are slated to testify before both the House Financial Services Committee and the Senate Banking Committee. The issue of abusive overdraft fees imposed by some of nation’s biggest banks – including Wells Fargo, JPMorgan Chase, and Bank of America – is more than likely to come up after the Consumer Financial Protection Bureau (CFPB) launched an initiative earlier this year to save consumers billions of dollars in exploitative “junk fees,” including overdraft fees. 

Ahead of the testimony, a new analysis from Accountable.US has found that in the first half of 2022, just three of these “megabanks”—Bank of America, Wells Fargo, and JPMorgan Chase—have together reported over $37 billion in net income while reaping $7.8 billion in revenue from service charges on consumers’ deposit accounts, including over $1.6 billion from overdraft fees. Meanwhile, these three banks have spent $25.7 billion on stock buybacks and shareholder dividends, representing 69.4% of their net income over this same period. 

Making matters worse, these three banks have faced at least $5.3 billion in fines and settlements since 2020, including $460.7 million in 2022 so far.

This practice continues to especially harm low-income consumers, who are often living paycheck-to-paycheck, or those relying on the timely receipt of benefit payments. These penalties are a persistent obstacle for many to achieve economic stability in their own lives or businesses. When so many families struggle to get ahead while dealing with this needless extra financial burden, it holds back the economy for everyone.

The hearings come amid reports that federal regulators are preparing to fine Bank of America for “charg[ing] struggling customers multiple overdraft fees when they were out of money” among other violations.  

While the practice is indefensible, it has not stopped the financial industry from trying.

In recent years, the industry’s rhetoric has lauded overdraft as a service that “saves customers money” and incentivizes consumers to “monitor and manage” their finances. The reality is that overdraft programs cost consumers billions each year, heavily benefit banks and their shareholders, and cause confusion and embarrassment for consumers. 

Corporate greed that has fueled inflation has already left consumers paying a high price, and big banks like Bank of America, Wells Fargo, and JPMorgan Chase are making matters even worse for low-income families by charging abusive overdraft fees on top of it all. These billions of dollars in abusive fees are being siphoned from the economy, money that could be otherwise spent on goods and services that create jobs rather than pad big banks’ bottom line. Cracking down on this unnecessary practice will only help boost the economy.

Billion-dollar banks would still be extremely profitable without nickel and diming low-income families under this exploitative practice. There’s simply no good reason for policymakers to protect it. 


Here are some of the excuses you may hear from the mega bank CEOs this week in defense of overdraft products – along with the reality [CLICK HERE for more information]: 

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