HARRISBURG, PA — Attorney General Josh Shapiro, along with a multistate coalition of attorneys general, this week called on the CEOs of JPMorgan Chase, Bank of America, U.S. Bank, and Wells Fargo to eliminate all overdraft fees on consumer bank accounts. The letter goes on to urge each bank to eliminate these fees by this summer in order to create a more fair and inclusive consumer financial system.
“We’ve seen how these fees hit families and communities of color harder than others,” said AG Shapiro. “It starts a vicious cycle that drives them deeper and deeper into debt. Eliminating these fees helps create a system that works for everyone.”
In some instances, consumers can be charged $35 for a purchase of $5 or less if it’s over their current balance. Studies have shown that the vast majority of overdraft fees fall on low-income consumers who earn less than $50,000 a year and communities of color. The consequences of these fees can be devastating to consumers’ financial health.
Despite the harm of overdraft practices being fairly well-known, overdraft fees continue to be big business for banks according to a recent study published by the Consumer Financial Protection Bureau (CFPB). JPMorgan Chase, Bank of America, U.S. Bank, and Wells Fargo are among the top five U.S. banks in total assets. According to the CFPB, three of these institutions alone brought in 44% of total overdraft and overdraft-like fees in 2019. Elimination of overdraft fees by these four institutions would drastically improve the financial health of millions of consumers across the county.
Earlier this year Citi Bank announced that it would eliminate overdraft fees, which followed a similar announcement late last year by Capital One.
Joining Attorney General Shapiro in sending the letter are the attorneys general for California, Connecticut, the District of Columbia, Delaware, Illinois, Iowa, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina (all except Bank of America), Oregon, and Washington.