U.S. Sens. Raphael Warnock (D-GA) and Sherrod Brown (D-OH) sent letters urging major banks to lower or fully eliminate their overdraft fees.
The letters were sent to the CEOs of Charles Schwab, JPMorgan Chase, PNC Financial Services Group, TD Group, Truist Financial, U.S. Bancorp, and Wells Fargo.
“Financial institutions should do all they can to ensure working families keep their hard-earned money by significantly reforming their overdraft practices,” the senators wrote. “These fees not only drain bank accounts but also push consumers out of the banking system and into the arms of unscrupulous and unsupervised lenders who are all too willing to overcharge them for similar services. The result is that millions of Americans are underbanked or unbanked.”
Warnock is the chair of the U.S. Senate Banking Subcommittee on Financial Institutions and Consumer Protection, and Brown chairs the Senate Committee on Banking, Housing, and Urban Affairs. U.S. Sens. Cory Booker (D-NJ), Jack Reed (D-RI), and Chris Van Hollen (D-MD) also signed the letter.
“Overdraft fees harm many consumers so much that they either voluntarily opt out of the banking system or are driven out altogether by account closures,” they added. “Indeed, the CFPB has found that those who opt in to overdraft fees are more likely to have their accounts involuntarily closed than those who do not. Ultimately, by charging overdraft fees, financial institutions are undermining consumers’ confidence in the banking system they need consumers to participate in.”
They are urging banks to either reduce overdraft fees or eliminate them entirely. They expect a response by April 7 with plans to do so.