CRC Chief of Legal and Strategy Kevin Stein issued the following statement on Wednesday, April 6 in response to California Attorney General Rob Bonta’s and other Democratic state attorneys generals’ call for JPMorgan Chase, Bank of America, Wells Fargo and U.S. Bank to eliminate overdraft and other harmful “junk” fees:
“Overdraft fees are pernicious for consumers and disproportionately impact vulnerable consumers, especially consumers from Black, Indigenous and People of Color communities. Because of this, CRC applauds Attorney General Bonta for urging these four banks, particularly U.S. Bank which is attempting to acquire Union Bank, to end overdraft fees. In November, we submitted a letter to federal regulators opposing the proposed U.S. Bank-Union Bank merger for several reasons, including concerns about charging consumers excessive overdraft and other fees.
“This fear was not unfounded. Between 2020 and 2021, at the height of the COVID pandemic, U.S. Bank charged its customers $340 and $338 million, respectively, in overdraft fees. And while we’re pleased U.S. Bank announced reforms to its overdraft policies in January, data reveals it continues to charge $36 per overdraft and allows four overdrafts per day. This does not provide a public benefit.
“Vulnerable consumers are not only daunted by the fee itself, but also by the threat of seeing their accounts closed due to incurring repeated overdraft fees, which may ultimately lead to exclusion from the financial mainstream.
“While we believe these banks should join their competitors and move away from overdraft fees, we certainly oppose the idea that U.S. Bank should be able to acquire Union Bank, which is a less aggressive overdraft fee-collecting bank, without any conditions or restrictions.”