NEW YORK—New York Attorney General Letitia James is leading a multistate coalition of attorneys general calling on the CEOs of JPMorgan Chase, Bank of America, U.S. Bank, and Wells Fargo to eliminate all overdraft fees on consumer bank accounts.
In a letter to each financial institution, James urged the bank to eliminate overdraft fees by summer of 2022 to create a “fairer and more inclusive consumer financial system,” the New York AG’s office reported.
According to the NYAG, numerous studies have shown that overdraft fees have “disproportionately affected vulnerable families and communities of color by unnecessarily saddling them with additional debts that they cannot afford.”
Hurting the ‘Vulnerable’
“For too long, excessive overdraft fees have hurt the most financially vulnerable New Yorkers,” said James in a statement. “Working families and low-income New Yorkers cannot afford to continue to be harmed by this unfair and punitive practice, while banks reap big profits. I am calling on the largest consumer banks in the nation to do the right thing and remove overdraft fees. We need a fairer and more inclusive banking system that supports all New Yorkers.”
The NYAG continued in its statement, “Overdraft fees have had harmful effects on millions of consumers nationwide. In some instances, consumers can be charged as much as $35 for a purchase of $5 or less. According to the Center for Responsible Lending, a study of overdraft-related fees charged in 2019 found that more than $11 billion in fees were charged, with 84% of those fees assessed to consumers with the lowest average account balances. Another study by the Pew Charitable Trust noted that more than 90% of such fees are paid by a small subset of consumers, who generally paid three or more such fees per year while earning less than $50,000.”
The States Involved
Joining James in sending the letters are the attorneys general of California, Connecticut, the District of Columbia, Delaware, Hawaii (along with the Hawaii Office of Consumer Protection), Illinois, Iowa, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, North Carolina, Oregon, Pennsylvania, and Washington.