Staten Island Is Most-Banked Borough In City: Quiet Plan To Rescind Rule Capping Bank Fees At $5 Will Negatively Impact Islanders

SCHUMER REVEALS: NEW EFFORT IN CONGRESS TO QUIETLY RAISE ‘JUNK’ BANK FEES COULD HIT STATEN ISLANDERS MORE THAN OTHER BOROUGHS; CHAIRS OF HOUSE FINANCE & SENATE BANKING COMMITTEES WANT TO OVERTURN RULE THAT FINALLY CAPPED MOST OVERDRAFT FEES AT $5; SENATOR SAYS MORE FEES WILL FOLLOW & RISE IF THIS GOES THROUGH; VOWS TO FIGHT EFFORT   

Editor’s note: According to the CFPB’s announcement of the excess late fee rule of $8, they said: 

“Lowers the immunity provision dollar amount for late fees to $8: Based on data analyzed by the CFPB, a late fee of $8 would be sufficient for larger card issuers, on average, to cover collection costs incurred as a result of late payments.

“Requires credit card issuers to show their math: Larger card issuers will be able to charge fees above the threshold so long as they can prove the higher fee is necessary to cover their actual collection costs.”

This is the announcement about overdraft fee limits applying to banks with over $10B in assets. Some of Staten Island’s smaller community banks would not be subject to this rule, though they may voluntarily lower their fees: 

“Cap their overdraft fee at $5: Under this simple option, covered banks and credit unions could simply cap their fee at $5, which is the estimated level at which most banks could be able to cover their costs associated with administering a courtesy overdraft program.

“Cap their fee at an amount that covers costs and losses: For banks that wish to offer overdraft as a convenient service rather than as a profit center, the final rule allows financial institutions to set their fee at an amount that covers their costs and losses…”

Schumer Exposes New But Quiet Plan In House Financial Services & Senate Banking To Overturn CFPB Rule Limiting Excessive Bank Fees That Would Cost Staten Island Households More—Because SI Is The Most Banked Borough Across NYC

Plan To Overturn CFPB Overdraft Fee Rule Would Allow Big Banks To Keep $5 Billion In Excessive Fees – But Would Open Door To Even More Fees Across SI & NYC; Schumer Sounds Alarm & Announces Full Opposition

Schumer: Quiet Plan To Side With Big Banks Could Mean A Waterfall Of Fees And Higher Costs For SI’ers That I Will Work To Stop    

Standing at a Staten Island shopping plaza, U.S. Senator Charles Schumer revealed and exposed a quiet plan that chairmen of the House Financial Service Committee and Senate Banking committee are working on right now to quietly overturn the Consumer Financial Protection Bureau’s (CFPB) overdraft fee rule that caps most big bank overdraft fees at just $5. The rule that protects consumers, which was finalized in December, reduces costs and is expected to save millions of households $5 billion in gratuitous overdraft fees. If the rule is overturned, those billions of dollars will go to big banks. Schumer said these banks don’t need to charge fees like this, and that this effort to let fees run wild will open the door to even more.

Schumer said that because Staten Island is the most banked borough, meaning it has the most bank accounts compared to others, that this plan would hurt Staten Islanders harder because fees follow the folks with the bank accounts. Schumer announced his opposition, and is sounding the alarm on the clandestine plan, and said that the CFPB’s overdraft fee rule is designed to protect people from being ripped off by big banks. He urged Senate and House to reject overturning the CFPB’s overdraft rule and to protect hard-working families instead of taking their hard-earned money to benefit big banks quietly, and behind their backs. He announced what happens next, now that he’s made this quiet plan very public.

“Republicans’ quiet plan to side with big banks could mean a waterfall of fees for Staten Islanders that I will work to stop,” said Senator Schumer. “Working families have been hurt by abusive bank fees and practices in the past, and the CFPB’s rule is about protecting hard-working families, not charging them more. So I urge my colleagues to reverse course here and reject overturning this overdraft rule to put money back in people’s pockets and out of the hands of big predatory banks. If they let this one fee fly, a waterfall of fees will follow and it is Staten Islanders that will feel the brunt.”

Last week, House Financial Service Committee Chairman French Hill (R-AR) and Senate Banking Committee Chairman Tim Scott (R-SC) introduced Congressional Review Act (CRA) resolutions to overturn the Consumer Financial Protection Bureau’s (CFPB) rule capping overdraft fees at banks and credit unions. The rule caps most big bank overdraft fees at just $5, down from the typical $35 charge per transaction, according to National Consumer Law Center. With these fees, banks take billions of dollars a year from families that can least afford it, and the chairmen are moving to give big banks this ability, Schumer explained. Banks don’t need to charge these fees and some banks, including Capitol One and Citibank, have completely eliminated overdraft fees, and they continue to cover overdrafts. However, other banks take about $1 billion a year in overdraft and nonsufficient funds (NSF) fees, and Wells Fargo is one of the biggest offenders.

The CFPB’s overdraft fee rule stops predatory practices that allows the biggest banks to earn billions in profits from the most vulnerable families. The rule doesn’t stop big banks from covering overdrafts—it caps fees for ‘overdraft coverage’ at $5 or the bank’s costs. Banks can still offer overdraft lines of credit without any price cap, though they are required to provide the same annual percentage rate (APR) pricing disclosure that credit cards provide and to give people adequate time to repay, NCLC explained.

Schumer explained how the rule helps everyone—especially Staten Island families as the borough is the most banked in New York City according to NYC Department of Consumer and Worker Protection—by lowering most big bank overdraft fees from $35 to $5, saving consumers $5 billion per year, reducing manipulative practices, and increasing transparency and fair competition.

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“Now that the word is out, you’ll start to see the banks, lobbyists, and the people that proposed this measure start to scramble, and devise a plan to defend it. But it’s indefensible. Who is for fees?” Schumer said. “Show me a politician that wants to run an ad on increasing all your fees. We’re blowing the lid on this disastrous plan and so what happens next? Watch them run away from this issue.”

Schumer warned that other fee increases and gaps in consumer protection could soon follow with:

·       ATM fees

·       Minimum balance fees for checking and savings accounts

·       Outlandish cashier’s check fees

·       Notary fees

·       Account “inactivity” fees

·       The removal of $8 cap on credit card late fees

·       No more Fair Credit Reporting (excluding medical bills from consumers credit score)

·       Selling consumer data without consent

·       No regulator for consumers to report predatory products

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Senator Charles Schumer

U.S. Senator Charles Ellis “Chuck” Schumer has dedicated his career to fighting for New York. He visits all 62 counties every year and has delivered countless large and small victories across the state, including delivering $20 billion to rebuild after the 9-11 terror attacks and passing a $63 billion relief package to help New York recover from Superstorm Sandy. From massive snowstorms in Western New York to numerous floods across Upstate, Chuck has delivered aid and support to New Yorkers in their time of need. From authoring a permanent tax credit to offset the rising costs of college tuition, to protecting Social Security and Medicare and encouraging job-creating infrastructure projects, Senator Schumer has made it a hallmark of his career to protect the middle class and those working to reach it – including finding common sense solutions to national issues.