'Poor Little Wells Fargo': Elizabeth Warren Slams GOP Effort To Remove CFPB Overdraft Protections

Forbes Breaking News

During remarks on the Senate floor Wednesday, Sen. Elizabeth Warren (D-MA) spoke about Republican efforts to remove CFPB protections.

Transcript

00:00President, I want to thank the Senator from Connecticut for his work today in defending

00:06the Consumer Financial Protection Bureau and highlighting again the importance of this work

00:12from CFPB to help level the playing field just a little between the billionaire banks

00:20and our hard-working service members and families that are living paycheck to paycheck.

00:27I also want to thank Senator Booker for coming here and talking today about how people from

00:33New Jersey have been directly affected by overdraft fee abuses and appreciate his work on this.

00:41President Trump and Republicans promised the Americans that they would lower their cost

00:47of living and instead they are now linking arms with some of the biggest banks in the country

00:54to impose billions of dollars in fees on working families. Today Republicans are voting to overturn

01:02a CFPB rule that prevents big banks like Bank of America, JPMorgan Chase, and Wells Fargo

01:10from saddling customers with hundreds of dollars in overdraft fees when a customer

01:17overdraws a checking account by only a few dollars. Let's be clear, this rule covers only

01:24the biggest banks, those with more than $10 billion in assets. Community banks are completely

01:32exempt from this. All this rule does is ensure that overdraft fees are reasonable. Under the rule,

01:40banks are allowed to recoup all of their costs, all of their losses associated with providing

01:46overdraft that is typically under $5, which is why the CFPB's rule generally caps overdraft fees

01:57at $5. But if the bank can show that its costs are harder, then they can charge the full amount

02:04of their actual costs and losses. What the banks cannot do is play a game of gotcha in which the

02:12bank manipulates the customer's account to hit the customers with hundreds of dollars in overdraft

02:20charges. Today a handful of giant banks are charging about $35 of bounced payment, squeezing

02:30families for far more than what it typically costs to offer this overdraft. And the consumers

02:37carrying the vast majority of these fees are disproportionately low-income Americans,

02:43with the typical customer who gets caught by overdraft fees ending up paying more than $400

02:52a year. Now, $400 can be the cost of a mortgage payment or rent for someone with a modest income.

03:00$400 can be the difference between their kid's medication or just going without. $400 for some

03:09families can be several weeks' worth of groceries. This money matters to millions of families.

03:17Altogether, the CFPB rule saves American families up to $5 billion a year. Republicans claim they

03:27care about lowering costs, but overturning this rule will make big banks richer and hard-working

03:34families poorer. The Republicans are deeply sympathetic to giant banks. They worry about

03:44poor little Wells Fargo. They shed a tear for JP Morgan's extra billion dollars in profits

03:52that they make from overdraft fees on top of the $27 billion they make in their other banking

03:59services. Yes, the Republicans worry about those giant banks and that $5 billion that they would

04:07have to forego if they could only charge $5 for an overdraft fee. Look, banks can survive

04:15with limits on overdraft fees. How do we know that? Because they're already doing it.

04:21In fact, many banks, including Capital One and Citibank, have eliminated overdraft fees entirely,

04:29and they are still making billions of dollars in profits. No, these fees are about kicking

04:37hard-working Americans when they are down. My constituent April from Massachusetts shared this.

04:45During the years of my life when money was always tight, nothing was more stressful than

04:51overdrafting my account by $1 only to lose $35 due to overdraft. More than once, that additional

05:00$35 loss tangled up my budget for multiple paychecks or made the difference between getting

05:07groceries or not. Joan, also from Massachusetts, talked about how insidious these fees can be.

05:16Quote, several times when money was tight and I refilled my account a bit too late, I was charged

05:23an overdraft fee that then itself caused the next check to bounce, causing another fee. On top of

05:31that, there were daily fees because the overdraft charges kept me behind even as I added money to

05:38the account. To make matters even worse, these abusive anti-consumer practices often target

05:45service members and military families. Last year, the CFPB ordered Navy Federal Credit Union

05:53to refund $80 million in illegal surprise overdraft fees, which they had charged service

06:01members even when the service members' accounts showed enough money to cover the transactions.

06:09Cracking down on abusive overdraft practices, particularly when they harm service members,

06:16has bipartisan support. A year ago, my then-colleague J.D. Vance and I launched an

06:24investigation into another credit union that had preyed on service members with extortionate

06:30overdraft fees. And I hope to see the same kind of bipartisan concern now and support for the CFPB

06:38rule that puts a stop to this squeeze on military families. And look, finally, I just want to

06:46mention, I know that my colleagues on the other side of the aisle and on this side of the aisle

06:52are concerned about debanking. Now, debanking is something that happens when a bank closes

06:58someone's account without any real explanation. Overdraft practices have been the reason for

07:08tens of millions of account closures, shutting out far too many Americans from our banking system.

07:17So, for everyone who has concerns about debanking, consider that the CFPB rule eliminates

07:25one of the main excuses that banks have used for debanking their customers. Look, our job is to

07:34lower costs for American families, not boost profits for giant banks. A vote against today's

07:41CRA is a vote to protect those families and save them $5 billion a year. I urge my colleagues

07:51to vote no. Thank you, Mr. President, and I yield the floor.

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