By Robert Brodsky
Banks have charged Long Islanders an estimated $120 million in overdraft, ATM and maintenance fees since the start of the pandemic, compounding the economic hardships experienced by low-income residents, according to a report issued by a coalition of progressive groups Wednesday.
The analysis, released by the NYS Community Equity Agenda — comprised of community, labor, civil rights, and economic justice groups — estimates that banks statewide exacted more than $1.6 billion in fees from New Yorkers since March 2020. Long Island was hit the second hardest among regions statewide, behind New York City.
“It’s horrifying to think of the people … that couldn’t get food on their table; that the lowest income people who were definitely the hardest hit by the pandemic were then hit by the banks,” said Lisa Tyson, director of the Long Island Progressive Coalition.
The New Economy Project, a Manhattan-based organization, estimated the amount of fees charged to New Yorkers based on the banks’ mandatory reports filed to the Federal Deposit Insurance Corporation‘s Summary of Deposits annual survey. The group extrapolated the fees charged to customers in each region based on the percent of deposits held in each bank.
On Long Island, the data indicates banks charged nearly $70 million in overdraft fees, almost $14 million in ATM fees and roughly $37 million in maintenance fees.
New York City residents paid an estimated $1.27 billion in fees, including nearly $754 million in overdraft fees alone, the groups found. Statewide, New Yorkers paid just under $1 billion in overdraft fees, more than $183 million in ATM fees and $471 million in maintenance fees, according to the analysis.
“It is so abhorrent and egregious that they are extracting all this money from struggling people during the crisis,” said Andy Morrison, associate director of the New Economy Project.
In March 2020, with the economy largely shutting down, Gov. Andrew M. Cuomo issued an executive order directing state-chartered banks to suspend all fees for overdrafts, ATMs and credit cards.
But the directive did not affect national commercial banks that are members of the Federal Reserve System such as JPMorgan Chase, Citibank and Bank of America.
And while the Federal Reserve Board waived overdraft fees for large banks during the early months of the pandemic — and recommended the financial institutions provide the same leniency to its customers — many banks kept their fees in place, records show.
JPMorgan Chase, which has 140 locations on Long Island, was responsible for nearly 40% of total fees charged to Long Islanders during the pandemic, the most of any bank, Morrison said.
Chase maintained it gave customers a break. “Last year, when customers said they were struggling, we waived fees on over 1 million deposit accounts, including overdraft fees — no questions asked,” responded Briana Curran, a spokeswoman for JPMorgan Chase.
Clare Cusack, president and chief executive of the New York Bankers Association, said most New York banks waived overdraft and other fees “in order to help lessen the financial hardship of the COVID-19 pandemic on New Yorkers” while offering customers “BankOn certified accounts” that do not charge for overdrafts, negative balances or account usage.
The Center for Responsible Lending, a nonprofit group based in North Carolina, has reported that the overwhelming majority of overdraft fees are paid by customers who carry low balances — typically less than $350. Many customers, often Blacks and Latinos, end up having their checking accounts closed as a result of those fees, the group found.
The New York advocacy groups said the solution is the creation of more community-based public banks that would not charge excessive fees. They support the NY Public Banking Act, which also has the support of many Long Island Democrats and would allow local governments to create their own publicly owned banks that would hold municipal deposits and reinvest in community needs, including affordable housing and small businesses.
“Long Islanders need alternatives such as local public banks to help rein in the profiteering by commercial banks because the current system is failing to focus them on serving consumers,” said Ian Wilder of Long Island Housing Services, a Bohemia-based fair housing nonprofit.