New York Attorney General Letitia James on Wednesday asked JPMorgan Chase & Co, Bank of America, US Bancorp, and Wells Fargo & Co to end all consumer overdraft fees by the summer.
In letters sent to the chief executives of four of the biggest U.S. consumer banks, James said the majority of overdraft fees are levied on “the most vulnerable consumers with the lowest average account balances.”
James’s letters come as banks are facing increased scrutiny from regulators and lawmakers for charging overdraft and other fees on consumers.
The U.S. Consumer Financial Protection Bureau (CFPB), the federal consumer watchdog, launched a campaign earlier this year to address what it calls “junk fees,” a catch-all for overdraft, credit card late payment fees, mortgage closing costs and other charges.
The banking industry earned $17 billion in overdraft fee revenue in 2019, according to a report commissioned by the industry group the Consumer Bankers Association.
In January, the CFPB issued a request for public input on whether banks and companies charge excessive fees on top of their upfront price — as well as the financial impact of fees on American families — the deadline for which is April 11. The agency has not yet said how it plans to proceed, however.
JPMorgan Chase & Co, Bank of America, Citigroup and Wells Fargo & Co have stopped charging non-sufficient funds fees – a penalty charged for bounced checks or automated withdrawals that overdraft a customer’s account. The banks have also changed their policies on charging overdraft fees, each in different ways.
In her letter, James asked the four banks to eliminate overdraft fees altogether, citing Citigroup Inc as an example of a bank that eliminated these fees.
The banks did not immediately respond to request for comment.
Last month, a group of U.S. Senate Democrats — including Senate Banking Chairman Sherrod Brown — sent letters to seven large banks pressing them to scrap or significantly reduce overdraft and other fees they charge customers. [L2N2VS1GA]
(Reporting by Elizabeth Dilts Marshall; Editing by Chris Reese and Aurora Ellis)
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