U.S. Senate Democrats press banks to scrap overdraft fees
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[March 26, 2022]
By Pete Schroeder
WASHINGTON (Reuters) - A group of U.S.
Senate Democrats is pressing large U.S. banks to scrap or significantly
reduce overdraft and other fees they charge customers with insufficient
funds.
In a letter sent to seven large firms Thursday, the group of five
lawmakers -- including Senate Banking Chairman Sherrod Brown -- called
for a "fairer and more transparent" fee structure.
Democratic lawmakers and regulators are placing heightened scrutiny on
bank fees. The group cited recent research from the Consumer Financial
Protection Bureau, which found nearly 80% of such fees are charged to
only 9% of accounts. The CFPB is currently soliciting public feedback on
ways to potentially curtail overdraft and other "junk fees," and a House
Financial Services subcommittee will hold a hearing Thursday on the
fees.
Under political and regulatory pressure, several large banks, including
some that received letters, have taken steps to curtail such fees.
![](http://archives.lincolndailynews.com/2022/Mar/26/images/ads/current/sunag_daily_sda_SFARM_2022.png)
In February, Citigroup announced it would eliminate overdraft fees by
this summer. JPMorgan Chase, Wells Fargo & Co and US Bancorp have moved
to give customers extra time to bring their account balances above zero.
Bank of America said it would reduce overdraft fees to $10 from $35
beginning in May and eliminate its "nonsufficient fund" fees.
JPMorgan had already taken other steps requested in the letter, such as
eliminating nonsufficient fund fees, according to a spokeswoman.
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![](../images/032622pics/news_m27.jpg)
Chairman Senator Sherrod Brown (D-OH) speaks during a Senate
Banking, Housing and Urban Affairs Committee confirmation hearing on
Capitol Hill in Washington, D.C., U.S. February 3, 2022. Bill
Clark/Pool via REUTERS
![](http://archives.lincolndailynews.com/2022/Mar/26/images/ads/current/newhollandbank_sda_SFARM_2022-.png) But banking groups are resisting
government efforts to eliminate overdraft fees, arguing they serve a
useful purpose.
"A majority of consumers who use the product do so
knowingly and count on it when unexpected expenses arise. As a
result, contrary to what is stated in the letter, the Consumer
Bankers Association believes taking action that would dramatically
restrict overdraft could force many families out of the
well-regulated, well-supervised banking and toward predatory payday
lenders," said CBA spokesperson Lauren Bair Bianchi.
Copies of the letter were sent to chief executives at JPMorgan,
Wells Fargo, Truist Financial Corp, PNC Financial Services Group, US
Bancorp and Charles Schwab Corp.
Spokespeople for the other banks either declined to comment or did
not respond to a request for comment.
(Reporting by Pete Schroeder; Editing by David Gregorio)
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