'Who Do You Stand For?': Cory Booker Delivers Passionate Defense Of CFPB Overdraft Protections

Forbes Breaking News

During remarks on the Senate floor Wednesday, Sen. Cory Booker (D-NJ) spoke about Republican efforts to remove CFPB protections.

Transcript

00:00This is a overdraft speech.

00:04It's about a common-sense rule that lowers costs for millions and millions of Americans,

00:11while carefully targeting really the most egregious, abusive overdraft practices

00:18in the financial industry today.

00:20Banks have long offered overdraft services to allow their customers to make purchases

00:25or even pay a bill, even if they lack sufficient funds in their account,

00:30while sometimes charging a fee for this service.

00:34But in recent years, banks have exploited this practice,

00:38charging customers billions of dollars in deceptive fees.

00:43A recent study found that more than half of all the people who overdraw their checking accounts

00:49and paid a fee could not recall consenting to the overdraft service for which they're being charged.

00:55Moreover, we know that customers who are being charged overdraft fees

01:00are overwhelmingly folks who are low-income, who work really hard, don't get that much pay,

01:06and a $20 overdraft fee just further pushes them into a financial trap,

01:14into this cycle downward of financial instability that's hard to pull out of.

01:21Too often, banks have been found trying to game the system, and this is really problematic.

01:27They try to game the system to impose fees on customers,

01:31even when they shouldn't be charged in the first place,

01:34by orchestrating their transactions,

01:37by improperly or delaying deposits customers make to make into their accounts.

01:45So just think about this.

01:46They can time your account by the time it hits your practice.

01:49You think you deposit a check, pull money out,

01:52but the way they rig the system is to create a gap in which you are actually in overdraft

01:57when technically you've already made that deposit.

02:01Meanwhile, these fees generated enormous amounts of revenues for banks,

02:07while most customers don't even know they've opted into this system.

02:13Opponents of the rule argue that it could restrict access to emergency credit.

02:18We all are supporters of this idea of emergency credit.

02:22They think that this is an example, they say, of government overreach

02:26and that it's going to hurt banks' revenue model.

02:28But to be honest, this isn't about protecting consumers for them,

02:32it's about protecting this massive new profit line for big banks.

02:38For years, I have fought against what is a predatory practice.

02:44I've introduced legislation to crack down on exploitative overdraft fees

02:48that banks charge consumers when they make a purchase or pay a bill

02:53that they don't have sufficient funds for in their account.

02:56Trying to stop the games that banks play

03:00to make it more difficult for people to avoid the overdraft fees in the first place.

03:06Now, the Consumer Finance Protection Bureau has been instrumental

03:09in cracking down on banks charging surprise overdraft fees,

03:13and many banks have said, you're right, this is a bad practice, we should stop.

03:17But not all of them.

03:20So last year, the CFPB finalized this rule to curb illegal and predatory practices.

03:28The rule lowered most big bank overdraft fees from $35 to $5,

03:35saving consumers in America, American hardworking citizens,

03:40saving them $5 billion a year.

03:44On average, it delivered $225 a year in savings for the average household.

03:52Think about this.

03:54It's about protecting households.

03:56There's still a consequence if you overdraft, but it can't be these usury rates.

04:01The overdraft rule did not ban overdraft fees outright,

04:05or go after small community banks and credit unions,

04:09which were exempted from the rule.

04:12It simply requires banks to either reduce their rates

04:17or comply with federal banking laws when charging high credit fees.

04:24Several financial institutions that I've mentioned,

04:27like Capital One and Citibank, have already eliminated overdraft fees

04:32and continue to provide overdraft protection.

04:37They're showing to their credit that it can be done

04:41and not somehow mess up their business model.

04:44You don't need to take advantage of consumers to make money.

04:50Meanwhile, though, Wells Fargo and JPMorgan Chase

04:54each earn over $1 billion a year in overdraft and NSF fees,

05:00nearly four times more than the next highest bank.

05:07Banks are showing, you know what, we don't want to jerk over the customers,

05:12while others, to the tune of over $1 billion a year,

05:16are still taking advantage of some of our most vulnerable

05:19and financially fragile Americans who are working hard every day

05:23to try to get out of poverty traps,

05:25yet banks take advantage of them and send them back.

05:31Perhaps most egregiously, in 2024,

05:34Navy Fed took nearly as much as the biggest banks

05:38in its service member, veteran, and other customers.

05:42They took $725 million despite a dramatically smaller customer base,

05:48clearly showing that they were trying to take advantage of our veterans,

05:53of our service members, and others.

05:56Who will stand up for them?

05:57Who will say you are not going to do predatory practices

06:02on our service members, on our veterans,

06:07dramatically more than other banks who eliminated these practices?

06:13For those who are most affected by overdraft fees,

06:16those folks living paycheck to paycheck,

06:18who are part of the 64% of Americans who live paycheck for paycheck,

06:24and are often minutes to hours away from having the money necessary

06:28to cover expenses that lead to overdraft fees,

06:32this rule is a lifeline to them and their families.

06:39Now, I was proud that New Jerseyans wrote into the CFPB,

06:43sharing how these predatory practices were impacting them.

06:46Allow me to read from a New Jerseyan from East Orange, my neighbor.

06:52They wrote, my account was closed with no notice

06:55due to a merchant charging my account into the overdrafts.

07:00I've complained for weeks about the said situation.

07:04Nothing was ever done.

07:06A $4,300 deposit was released by the bank account.

07:12Due to account closing, I currently have no access to the funds that were released.

07:21One anonymous service member from Carteret, New Jersey, wrote,

07:25I am writing to file a complaint against Navy Federal Credit Union

07:30regarding multiple overdraft fees I've incurred.

07:34Despite having sufficient funds when the transactions were authorized,

07:39I was charged due to lagged posting of charges and credits.

07:45This issue aligns with the recent findings of the CFPB.

07:49For similar practices, where transactions settled with insufficient balances

07:55despite initially available funds,

07:57I believe these practices are unfair,

08:01and I request an investigation into my account transactions.

08:05This is a New Jerseyan who's playing by the rules,

08:10who's frustrated because of practices that are clearly predatory

08:14and that take advantage of folks who are living paycheck to paycheck.

08:19And there are a service member.

08:22Another service member from Manchester Township was erroneously charged

08:27and then overdrawn from his business account from Wells Fargo.

08:33The extra $210 that was withdrawn from my account,

08:37including the original withdrawals and overdraft fees,

08:41caused a cascade effect that led to $1,100 in overdraft fees this year.

08:49I called Wells Fargo twice to ask for help in stopping these increasing overdraft fees.

08:56They reimbursed me for two overdraft fees, $70.

09:01I was told that they were only allowed to reverse two overdraft fees a year.

09:07They also told me there was nothing else they could do to help me.

09:10The overdraft fees of $1,100 over the last two months have caused me tremendous financial burden.

09:18As of today's date, I'm still being charged overdraft fees.

09:23I don't know what to do, and Wells Fargo has refused to help me.

09:28I will probably close my account with Wells Fargo.

09:31However, it's a nightmare trying to change all the insurance companies that I receive payment for.

09:39There's a service member, a small business person,

09:44getting screwed over because they don't have the protection that this rule would provide.

09:51To rescind this rule in order to further enrich a small handful of abusive banks

10:00and their shareholders, which allow this to happen at the expense of working families,

10:06at the expense of veterans, at the expense of our service members,

10:11this is despicable, and this body shouldn't be on the sides of big banks and their further enrichment.

10:18They should be on the side of veterans and service members

10:21and Americans struggling working paycheck to paycheck,

10:24especially when certain banks have shown they don't need these usury fees to make enormous profits.

10:34Where's the moral value in that?

10:38Instead of lowering prices and protecting consumers,

10:42I now see members of this body who I know the values they speak to.

10:48Some of my colleagues on the Senate Republican side want to raise these prices on Americans

10:53and allow these banks to prey upon service members, veterans, and working Americans.

11:00And this is all while the president and Elon Musk have considered their onslaught an attack

11:07on the Consumer Finance Protection Bureau,

11:11which has returned billions of dollars to American consumers.

11:15This Consumer Financial Protection Bureau was created in the aftermath of the 2008 crisis

11:22to protect Americans from predatory practices and fight discrimination in the financial sector.

11:28I wasn't here in Washington, but when the banks needed a bailout,

11:34we were here for the banks.

11:38I don't know if we charged them overdraft fees,

11:43but are we going to stand up for consumers now?

11:49$19.7 billion dollars the CFPB has returned to the American consumers

11:55in compensation, canceled debt, and other relief.

11:59$19.7 billion dollars.

12:02I know firsthand the difference that the work of this agency has made for American families.

12:09I saw it in my time as a young lawyer taking on slumlords in Newark.

12:15Hardworking people who could barely afford rent, work 50, 60 hours a week,

12:20barely affording rent, fighting to put food on the table for their kids,

12:24and one improper practice at a bank can throw them into financial crisis.

12:35Predatory practices, scams, exploitation, which some banks have stopped doing.

12:43I don't understand that this is even an issue here.

12:47This rule is to help consumers.

12:49This rule is to help veterans.

12:51This rule is to help service members.

12:53This rule is to help the Americans that are struggling.

12:55Because the top 50% of our country has done extraordinarily well

13:00in the last economies under Republican and Democratic presidents,

13:03but the data is clear, the bottom 50% of our country is working harder and making less.

13:10And we want to advantage the big banks that have record corporate profits.

13:15I won't back down from this fight to save the CFPB,

13:19to save those who fight to defend consumers from being screwed over from big institutions.

13:25Look, I know what it's like in my family story to fight.

13:29I know what it's like to be up against insurmountable odds for my family stories.

13:34I know what it's like to be searching for someone who will stand up for you

13:38when you're doing everything right in this country,

13:40where you're working hard, where you're playing by the rules,

13:43where you're serving in your community, when you're coaching Little League,

13:46when you're trying to help on your block.

13:48I know what it's like when you're volunteering at your church

13:50to turn around and have some big, impersonal, distant bank screw you for their profits.

13:59It's time for this body to do the right thing.

14:01This is not political, this is not partisan, this is who do you stand for.

14:07At a time where people are cynical about all of Congress,

14:11they don't feel like anybody's fighting for them,

14:13who's going to stand up today and say,

14:16I fight for the little guy.

14:19I fight for the small business.

14:21I fight for the working service member.

14:23Who's going to stand up?

14:25Who is going to stand up?

14:27I know where I stand, and I encourage my colleagues

14:32to preserve this rule that stops predatory big banks

14:39from savaging the financial lives of too many Americans.

14:44To the distinguished president, I yield the floor.

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