WASHINGTON, D.C. – Ahead of Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra’s appearances before the Senate Banking Committee and House Financial Services Committee (HFSC) this week, government watchdog Accountable.US released a report on how several banks are needlessly profiteering off of ‘junk fees’ – abusive, often-hidden fees and penalties that disproportionately prey on the poor and the CFPB has pledged to crack down on. Accountable.US found seven major banks raked in $1.2 billion worth of overdraft and non-sufficient fund fees in 2021 – amounting to over 12% of the nearly $10 billion in profits they made in the same year.
The excess profits on the backs of vulnerable families come despite pledges from several big banks to eliminate overdraft fees in 2021 and late 2022 amid growing scrutiny from Congress and the Biden administration — and after the industry reported a staggering $15.5 billion in revenue in 2019 from such fees.
Accountable.US also released a new analysis revealing that conservative members of the Senate Banking Committee and House Financial Services Committee (HFSC) have taken over $5.8 million in career campaign money from banks that charge overdraft fees, while also holding as much as $460,000 in their stock. Republican members of the HFSC have already mounted an aggressive defense of these regressive fees that undermine the economy.
As many families struggle to navigate a fragile economic recovery, the last thing they need is the added burden of hidden high-cost fees, like a ridiculous $35 overdraft charge on a $20 purchase. This is happening on an alarming scale because many banks that would still be extremely profitable without nickel and diming low-income families would rather make a small group of investors even richer.
But the financial industry’s greed is not just hurting the vulnerable. 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 junk fees shouldn’t be controversial, but unfortunately many lawmakers that have taken money from, or hold stock in, companies that abuse the practice have already decided to put special and personal interests above consumers.”