Will Conservative Senators Put Low-Income Consumers First, or Their Industry Donors?
Washington D.C. – Ahead of today’s U.S. Senate Banking subcommittee hearing ‘Examining Overdraft Fees and Their Effects on Working Families,’ government watchdog Accountable.US urged Senators to focus their attention on the millions of low-income families most adversely harmed by abusive overdraft fees rather than the extra profits of their banking industry donors. A new Accountable.US analysis found the star witness invited by Republicans today — David Pommerehn, General Counsel and Senior Vice President at Consumer Bankers Association (CBA) – has personally donated $29,900 to the CBA PAC, which has contributed at least $105,000 to conservative Members of the subcommittee on Financial Institutions and Consumer Protection.
While Pommerehn has previously defended overdraft services by claiming limits on them would “adversely affect” banks, a recent Accountable.US report found seven major banks penalized consumers with $1.2 billion worth of overdraft and non-sufficient fund fees in 2021, which amounted to over 12% of the nearly $10 billion in profits they made in the same year. It’s clear these banks would still be highly profitable without these costly, often-hidden charges that have been called ‘fee creep’ and especially target less-advantaged consumers in communities of color.
As many families struggle to get ahead during 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 gallon of milk. To be clear, banks would still be extremely profitable without nickel and diming low-income families, yet too many would rather make a small group of investors even richer.
But the financial industry’s greed is not just hurting those forced to the margins. 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 abusive overdraft fees shouldn’t be controversial, but unfortunately Banking Committee conservatives that have taken money from these abusive banks are poised to make empty excuses for their industry donors.”