In response to the Consumer Financial Protection Bureau’s (CFPB) release of a proposed rule to cap bank overdraft fees, National Community Reinvestment Coalition President and CEO Jesse Van Tol released the following statement:
“Steep overdraft fees are effectively a penalty for not being rich enough to never worry about whether you moved enough money into your checking account before you swiped your debit card at the grocery. I’m glad to see the CFPB put forth this rule to curb the abusive excesses of what should be a much more modest guardrail for the industry. The absurdly high fees many banks have continued to charge were possible in part because of outdated ideas tied to a defunct era where people regularly mailed paper checks to each other. As digital transactions replaced that system, banks turned a once-sensible system into a way of fleecing people who live paycheck to paycheck – a morally repugnant and economically indefensible practice which the CFPB is right to curb.
The agency’s estimated $3.5 billion in savings for depositors at the nation’s largest banks represents obviously good news for those specific account-holders. But everyone should remember that we all share one economy and one society. That $3.5 billion is being liberated from corporate balance sheets – where it has only benefitted bank shareholders and the investor class whose wealth is closely tied to stock prices – so it can be put to more productive use for the rest of us.”