FOR IMMEDIATE RELEASE: January 17, 2024
Contacts: Raquel Villagra, New Economy Project, firstname.lastname@example.org
NYS Community Equity Agenda Coalition Statement on CFPB’s Proposed Overdraft Rule
The NYS Community Equity Agenda released the following statement in response to the Consumer Financial Protection Bureau (CFPB)’s announcement of its proposed rule on overdraft fees:
“We applaud the CFPB for issuing a strong proposed rule to crack down on big banks’ predatory overdraft fees, which have long exploited low-income New Yorkers and extracted massive sums from low-income neighborhoods and communities of color. During the first year of the pandemic, for example, banks drained $1 billion in overdraft fees from struggling New Yorkers’ accounts. Since then, banks have continued to soak New Yorkers with exorbitant overdraft fees; JPMorgan Chase, New York’s largest bank by share of deposits, raked in another $839 million in overdraft fees from January to September 2023.
“We need a strong CFPB precisely to address abusive and predatory financial practices like overdraft that extract wealth from low-income and Black and brown communities. Research shows that customers with account balances of less than $350 pay the vast majority of overdraft fees and that the fees disproportionately impact Black and brown account holders, often driving them out of the banking system. The CFPB’s proposed rule is projected to keep an estimated $3.5 billion per year in people’s pockets—money that banks would otherwise siphon through high and hidden overdraft fees.
“As we push for this critical rule’s implementation and expansion to all financial institutions, we also call on Governor Kathy Hochul and the State Legislature to take bold steps to transform New York’s unjust financial system and economy. First and foremost, New York must enact the New York Public Banking Act (S1754/A3352), which would enable cities and counties to divest public money from banks that exploit New Yorkers for shareholder profit, and create public banks that serve the public good and have a mission to address structural inequities.”
The NYS Community Equity Agenda is a broad-based coalition of more than 50 community, labor, civil rights, and legal services groups, faith-based and cooperative organizations, and community development financial institutions committed to fighting for a just economy and to building institutions that are led by and support Black, brown, and working-class New Yorkers and communities.