Comments to the U.S. House Committee on Financial Services: The End of Overdraft Fees?
March 15, 2022
The Honorable Ed Perlmutter, Chair
U.S. House Committee on Financial Services
U.S. House of Representatives
Washington, DC 20515
The Honorable Blaine Luetkemeyer, Ranking Member
U.S. House Committee on Financial Services
U.S. House of Representatives
Washington, DC 20515
RE: Comments to the U.S. House Committee on Financial Services hearing on March 31, 2022, “The End of Overdraft Fees? Examining the Movement to Eliminate Fees Costing Consumers Billions”
Dear Chair Perlmutter, Ranking Member Luetkemeyer, and Members of the U.S. House Financial Services Subcommittee on Consumer Protection and Financial Institutions —
Thank you for initiating this important hearing, “The End of Overdraft Fees? Examining the Movement to Eliminate Fees Costing Consumers Billions” on March 31, 2022. As a social work practitioner and researcher with nearly two decades of experience in the field of retail banking and financial services, including research that considers racial disparities, I am submitting my comments about banks’ recent announcements to eliminate overdraft fees.
Overdraft fees have garnered significant attention from consumer advocates and policymakers given that these fees operate similarly to the exorbitant interest rates on payday loans and disproportionately affect banks’ poor White and racially marginalized customers. And, after decades of research and advocacy documenting the harms of overdraft fees,[1] their possible elimination — along with the punitive and racialized impacts — is welcomed.
During the last several months, numerous banks have advertised plans to change, reduce, or eliminate overdraft fees. These include some of the country’s largest banks, which collectively hold a significant share of all deposits.[2] For instance, in December 2021, Capital One announced that it would eliminate nonsufficient funds (NSF) fees and provide customers with free overdraft protection, including raising the amount a customer can overdraw before triggering fees.[3] JPMorgan Chase & Co. announced giving customers one day to restore overdrawn accounts and granting early access to direct payroll deposits.[4] Bank of America and Wells Fargo announced fee changes on the same day in January 2022. Bank of America pledged to eliminate NSF fees and reduce overdraft fees from $35 to $10.[5] Wells Fargo announced plans to offer customers a 24-hour grace period to cover their overdrawn accounts.[6]
My comments address the timing of banks’ advertised changes to overdraft fees and my concerns that these seemingly favorable changes disguise banks’ other profit-seeking activities and distract from concomitant and worrisome trends. For example, why are banks advertising changes now after decades of resistance? What else is happening in the broader political economy to compel these changes? What are banks’ plans for replacing the revenue streams lost from these sizable fees? To begin addressing these questions, I describe the current state of overdraft fees, a recent history of the financial system, trends in public trust, and advances in financial technology or “fintech.” Banks’ advertised changes should be understood in the contexts of historic and contemporary racialized costs of banking, banks’ activities during the Great Recession and Pandemic Recession that harmed customers, noteworthy declines in public trust of banks, and a growing fintech industry that impinges on banks’ profits and amplifies customers’ surveillance.
Regardless of the reasons for banks’ advertised changes to overdraft fees, there are real steps that can be taken right now to eliminate these harmful fees and better ensure that everyone who wants a transaction account can afford one. Policymakers should require all banks to offer free low- or no-cost transaction accounts without exorbitant overdraft charges in all of their markets, with robust advertisement and information campaigns to reach low-income customers. This is similar to legislation that was enacted in Canada in 2001 that required all banks to offer a low-cost account of no more than $4 per month regardless of customers’ employment status or criminal background.[7] Moreover, Canada’s Bank Act (1991, Sec. 458.1) allows households to cash checks from the federal government at banks free of charge, even without being an existing customer. Banks are required to cash checks up to $1,500. In the U.S., legislation like the Automatic Boost to Communities Act, Banking for All Act, SAFE Banking Act, and Overdraft Protection Act would all be important steps in this direction.
Private banks have been unable or unwilling to support full financial inclusion despite operating in the U.S. for nearly two centuries. We have all spent much time trying to convince and cajole private banks into providing the most basic of financial services to poor White, racially marginalized, and other historically excluded customers, which they continue to fail to do.
If private banks remain unable or unwilling to take the steps necessary for creating equal, dignified access to retail financial services, then they should step aside and enthusiastically support options such as postal banking, public banking, mission-driven Community Development Financial Institutions (CDFIs), and mutual aid or solidarity economy networks, which are dedicated to serving people in need without charging expensive fees and adding to burdensome debt.
In so doing, we could put more time towards envisioning and creating a banking and financial system that is equitable, sustainable, and generously invested in the public it should be designed to serve.
Thank you for the opportunity to offer my comments.
Sincerely,
Terri Friedline, PhD
Associate Professor of Social Work
University of Michigan
The State of Overdraft Fees
Overdraft fees are an important source of revenue for banks. As Devin Fergus reports in his book, Land of the Fee, banks’ revenue from overdraft fees alone increased from $200 million in 1984 to billions of dollars by 2009.[8] Over the last decade, banks have generated between $10 and $12 billion in overdraft fee revenue per year with steady annual increases of 2% and 5%.[9] Banks reportedly collected $12 billion in overdraft fee revenue in 2019 before the amount plateaued to around $6 billion in 2020 and then increased to pre-pandemic levels.[10] The third and fourth quarters of 2020 were banks’ most profitable of the year for overdraft fees, which coincided with widespread COVID-19 infections and a skyrocketing unemployment rate.[11] These fee patterns are similar for small community banks and credit unions,[12] with some analysts suggesting that overdraft fee revenue makes up an even greater share of total profits at smaller institutions.[13]
Overdraft fees operate a lot like payday loans, as consumer advocacy groups have documented.[14] The average transaction amount that triggers a negative account balance is $4, or about the cost of a cup of coffee. However, banks charge an average overdraft fee of $34 — essentially an 800 percent average annual interest rate that is nearly double the average rate charged by payday lenders.[15] In addition to charging similar interest rates, there is evidence that banks cooperate with payday and other high-cost lenders in charging overdraft and NSF fees. Among payday loan borrowers who take out loans online, half accumulate an average of $185 in overdraft fees and other bank penalties.[16] Payday lenders trigger overdrafts and account closures when they take their payments directly out of borrowers’ bank accounts[17] — a practice the CFPB’s original rule on small-dollar lending aimed to prohibit.[18]
Overdraft fees are also racialized, meaning that a significant portion of banks’ revenue from these fees comes from racially marginalized customers. Whereas income and poverty are determining factors for White customers, racially marginalized customers pay more in overdraft fees regardless of their financial standing. Banks disproportionately charge overdraft fees to Black and Latinx customers, with Black customers paying about $190 more in total checking account costs and fees when compared to White and Asian customers.[19] Involuntary account closures due to these fees occur more frequently in counties with higher populations of poor and Black residents, even after controlling for a range of demographic characteristics like education, employment, and income.[20]
A Recent History of the Financial System
Banks’ advertisements to change, reduce, or eliminate overdraft fees should be interpreted within historical context,[21] including recent and significant economic recessions. The United States has experienced several recent economic upheavals with implications for the financial system, including consumer or retail financial institutions. Banks received widespread criticisms for their practices and activities during the 2007 Great Recession and the 2020 Pandemic Recession. Congressional hearings, including previous hearings convened by the U.S. House Committee on Financial Services, have tried to hold banks accountable for their roles in harming consumers and the economy.
The Great Recession that peaked between 2007 and 2009 significantly impacted households’ financial circumstances and wealth holdings,[22] especially through the foreclosure crisis. The typical Black household lost 53% of their already-limited wealth compared to 16% of the typical White family[23] and banks contributed to these disparities by engaging in racially-targeted subprime lending.[24] Black women were especially impacted.[25] Bankers’ own testimonies in mortgage lending lawsuits revealed intentional discrimination, including lawsuits brought to the U.S. Department of Justice Civil Rights Division. According to research by Douglas Massey and colleagues, bankers and loan officers “referred to subprime loans in minority communities as ‘ghetto loans’ and minority customers as…‘mud people,’”[26] alluding to the structural nature of racism in the financial system.[27] Regulators — including the Consumer Financial Protection Bureau (CFPB) that was established in 2010 — stepped up scrutiny over banks’ practices and activities, and North American banks have paid over $200 billion in fines since 2007.[28]
People around the world gathered as part of the Occupy Wall Street movement to express anger and frustration at financial institutions for their roles in the Great Recession. Protestors in the United States criticized massive bailouts that private banks received from the federal government. Hundreds of thousands of people participated in the Occupy Wall Street movement with protests in financial districts of over 600 U.S. cities.[29] At the time, 40% of U.S. adults supported the Occupy Wall Street movement and 77% agreed that rich people and corporations, including banks, held too much power.[30]
Indigenous-led protest movements and protests connected to Occupy Wall Street also criticized private banks for financing and investing in environmentally-harmful development projects. In an era when the world is greatly affected by climate devastation, banks’ enabling of coal mining and oil pipelines is cause for concern. For example, activists have led calls to divest from banks that financed the Dakota Access Pipeline (#NoDAPL).[31] In a unanimous city council vote in 2017, Seattle became one of the first cities to promise withdrawing their money from Wells Fargo as punishment for their financing of the Dakota Access Pipeline.[32] The Los Angeles city council voted to divest from Wells Fargo just a few months later.[33] These financing and investment activities have understandably wrought significant public ire given that the most recent climate reports foretell of impending planetary catastrophes without immediate divestment from fossil fuels.[34]
The effects from the Great Recession were still part of routine, daily life when the rapid spread of the novel coronavirus, COVID-19, helped to induce the Pandemic Recession in 2020. Nearly 22 million workers filed for unemployment during a four-week span in March and April 2020 — more than a 2,000 percent increase from the number of claims filed during a comparable pre-coronavirus time frame and five times greater than the number of claims filed during the worst period of the Great Recession.[35]
Banks again received widespread criticism for their practices and procedures during the Pandemic Recession, including acting in ways that worsened the effects of the recession for many families. The CFPB received nearly 55,000 complaints related to checking and savings accounts between March 2020 and February 2022 (compared to only 37,000 complaints during the same time frame two years prior to the pandemic). These complaints included overdraft fees. Banks were criticized for charging overdraft fees while people were experiencing financial devastation.[36] Banks also automatically garnished economic stimulus payments that were direct deposited into customers’ accounts in order to repay overdraft and other debts.[37] Banks prioritized their own customers when processing small business loan applications which led to the program disproportionately advantaging White-owned businesses.[38] And while many people faced devastation, private banks were set to surpass the annual profits they accumulated pre-pandemic.
Declines in Public Trust of Banks
Given this recent history, it is unsurprising that, on average, public trust in private banks is waning. When the Federal Deposit Insurance Corporation (FDIC) began surveys in 2009 that measured reasons that households did not have bank accounts, 7% of respondents indicated lack of trust as a concern.[39] Ten years later, after the Great Recession and on the cusp of the Pandemic Recession, the FDIC’s 2019 report indicated that this percentage rose to 36%. Today, 63% U.S. adults report having “some” or “very little” confidence in banks in 2021[40] — a percentage that remains consistent regardless of respondents’ political affiliations.
Banks’ unpredictable costs and fees and concerns regarding surveillance may underlie the decline in public trust. People’s economic circumstances are increasingly precarious as a result of stagnating incomes, persisting wage inequalities, and rising debt burdens.[41] As the costs of everyday living have become more expensive, poor families are less able to afford the high costs and fees that banks charge for opening and maintaining a transaction account.[42] In the FDIC’s 2019 report, among reasons for not having a bank account, 49% of respondents indicated that they don’t have enough money to maintain an account and 31% indicated that fees are too unpredictable.
People’s rightful concerns about rising surveillance[43] may also contribute to declines in trust and confidence. Concerns about privacy related to bank account status have increased 10 percentage points over the last few years. The first time the FDIC measured privacy was in 2013, and 26% of households reported this as a reason for not having a bank account.[44] In 2019, 36% of households without a bank account indicated that “avoiding a bank gives me more privacy.” In an era where surveillance is increasing across multiple contexts, and especially as banks and financial institutions rely on technological advances,[45] safety and privacy may become more important for understanding declines in trust and confidence.
Banks’ overreliance on technology makes everyday aspects of retail banking more opaque for customers.[46] This contributes to less transparency about costs and fees and also raises concerns in other important areas like identification and ”Know Your Customer” or KYC laws. Banks — like technology companies — collect substantial amounts of data and information on customers. There are real concerns that banks can disclose personal data and information in ways that harm customers, such as sharing data with police and Immigrations and Customs Enforcement (ICE). Some banks have asked customers about their citizenship status during retail transactions and righty signaled customers’ alarms about their safety.[47] Surveillance can make using money and conducting routine transactions dangerous — for poor White, immigrant, and racially marginalized customers and for Black customers, in particular.
The extent to which trends in public trust are connected to surveillance, so too should the racialization and disparate impacts of surveillance. While marginalized groups are disproportionately harmed by surveillance, there are widespread implications for everyone in society. In her book, Dark Matters, Simone Brown connects contemporary surveillance to slavery and its afterlife, writing, “Racializing surveillance is a technology of social control where surveillance practices, policies, and performances concern the production of norms pertaining to race and exercise a ‘power to define what is in or out of place’…[H]ow things get ordered racially by way of surveillance depends on space and time and is subject to change, but most often upholds negating strategies that first accompanied European colonial expansion and transatlantic slavery that sought to structure social relations and institutions in ways that privilege whiteness.”[48] In recent testimony to the U.S. House Committee on Financial Services, Chris Gilliard observed, “Because of how algorithms are created and trained, historical biases make their way into systems even when computational tools don’t use identity markers as metrics for decision making, but because of preexisting social realities and also because of the ways that so many different data points can serve as proxies for prohibited categories.”[49] Surveillance remains a critical area of study for understanding banks’ and technology companies’ practices and activities, including implications for public trust and confidence.
Advances in Financial Technology
The growing financial technology or “fintech” industry also helps to understand banks’ recent advertised changes to overdraft fees.[50] Fintech refers to an array of customer- and institution-facing digital technologies that includes data algorithms, mobile banking applications, blockchain and distributed ledger technologies, digital currencies, and payment systems. People use fintech when they use online banking or peer-to-peer payments, while banks leverage fintech for their back-end processes like algorithmic credit scoring and lending risk models. A lot of discussion about fintech focuses on customers at the level of retail transactions; however, banks have been advertising the benefits of these technologies to other financial service and technology companies since at least the 1990s, alongside advancing Internet capabilities. Therefore, it is important to be aware of and investigate how banks use these technologies at corporate levels, as well.
As I wrote in a recent article for The American Prospect, banks’ recent advertisements about changes to overdraft fees are part of jockeying with the fintech industry over profits, “For decades, banks have ignored people’s demands for the elimination of overdraft fees, free or low-cost checking accounts, and low-interest loans and mortgages that would have come at the expense of their bottom lines. While some banks have framed their recent decisions to discontinue overdraft fees as part of commitments to advance racial equity, these decisions coincide with competition from tech companies and threats of federal regulation and oversight. In actuality, retail banks spend about $60 million per year on lobbying efforts to avoid demands from public policymakers requiring them to offer affordable products and services.”[51]
Fintech companies have cut into banks’ customer base with promises of transaction accounts without overdraft fees; and, fintech companies have been relying on interchange fees to generate profits. According to Michael Moebs, CEO of the financial industry research and consulting firm Moebs Services, “The fintechs mount the greatest overdraft challenge.”[52] Moebs is further referenced in predicting how overdraft fees will evolve, “Despite the heightened political focus on fees and other financial fairness issues, Moebs doesn’t see overdrafts, nor the revenue they generate, going away, but it will increasingly take a different form…[A]s Moebs recommends, [banks should] lower the price to less than $20 per overdraft and raise the limit. The average industry overdraft limit remains where it’s been for years — $500. That’s the amount a consumer can overdraft up to. Moebs urges banks and credit unions to raise the limit to a minimum of $1,500 and lower the price below $20 and ‘consumers will love you.’ It reduces their cost and gives them more of a cushion should they make a mistake, he explains. Ultimately the bottom line impact will be nil, Moebs maintains, because people will overdraft more as a result.” Moebs’ quotes are important here, because his company is frequently cited in news reports as a source for explaining banks’ overdraft fee revenue.[53]
Banks may be hoping to improve relationships with their customers and garner good favor by advertising changes to overdraft fees, despite the changes having little negative (if any) impacts on their bottom lines. Meanwhile, like fintech companies, banks may be planning to generate more profits from interchange fees, which are less transparent and harder for the public to discern the impacts of these fees. Banks’ revenue from interchange fees has already been increasing at annual rates of about 7% — a higher annual percentage point increase than overdraft fees — and generated $24 billion in revenue in 2019.[54]
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This letter has been minimally edited for readability since the original submission in March 2022.
[1] Researchers at the Federal Reserve Bank of Richmond and legal scholars published discussion including concerns of overdraft and nonsufficient funds (NSF) fees in the 1987s. The Center for Responsible Lending has published reports that present concerns with overdraft fees since at least the early 2000s. The Bank On movement has been working since the late 2000s to cajole resistant banks into adopting account features that are more favorable to low-income customers.
Burford, E. (1987). Good faith and nonsufficient fund charges in Louisiana banking. Southern University Law Review, 14(2), 295–303.
Duby, J., Halperin, E., & James, L. (2005). High cost & hidden from view: The $10 billion overdraft loan market. Durham, NC: Center for Responsible Lending. https://www.responsiblelending.org/sites/default/files/nodes/files/research-publication/ip009-High_Cost_Overdraft-0505.pdf
Mengle, D.L., Humphrey, D.B., & Summers, B.J. (1987). Intraday credit: Risk, value, and pricing. Richmond, VA: Federal Reserve Bank of Richmond. https://fraser.stlouisfed.org/files/docs/publications/frbrichreview/rev_frbrich198701.pdf
[2] As of December 31, 2021, the four largest banks including JP Morgan Chase & Co., Bank of America, Wells Fargo, and Citibank held a cumulative 43% — a percentage that approaches nearly half — of all domestic assets.
Board of Governors of the Federal Reserve System. (2021). Large commercial banks: Insured U.S.-chartered commercial banks that have consolidated assets of $300 million or more, ranked by consolidated assets. Washington, DC: Board of Governors of the Federal Reserve System. https://www.federalreserve.gov/releases/lbr/current/
[3] La Monica, P.R. (2021, December 2). Capital One is the first big bank to get rid of overdraft fees. CNN. https://www.cnn.com/2021/12/01/investing/capital-one-overdraft-fees/index.html
[4] Henry, D. (2021, December 8). JPMorgan Chase reduces bank overdraft fees in bid for customers. US News. https://money.usnews.com/investing/news/articles/2021-12-08/jpmorgan-chase-reduces-bank-overdraft-fees-in-bid-for-customers
[5] Kaplan, A. (2022, January 11). Bank of America cuts overdraft fees, eliminates insufficient funds fees. Forbes. https://www.forbes.com/sites/annakaplan/2022/01/11/bank-of-america-cuts-overdraft-fees-eliminates-insufficient-funds-fees/?sh=3bf6a9de53f2
[6] Adamczyk, A. (2022, January 19). Big banks are slashing overdraft fees — here’s how to avoid them altogether. CNBC. https://www.cnbc.com/2022/01/19/bank-of-america-wells-fargo-announce-changes-to-overdraft-fees.html#:~:text=Wells%20Fargo%20will%20also%20eliminate,before%20they%20incur%20a%20fee.
[7] The Financial Consumer Agency of Canada Act of 2001 established the Financial Consumer Agency of Canada, which oversees banks’ provision of these low-cost transaction accounts. Under the act, everyone has a right to open a bank account — even customers who have a criminal record, file for bankruptcy, and lack a job, regular income, or money for an initial deposit. Banks cannot turn away an individual who wants to open a bank account and has valid, government-issued identification. For more information on Canada’s government check cashing, see http://www.fcac-acfc.gc.ca/eng/resources/publications/yourRights/Pages/Cashingy-Encaisse.aspx and Bank Act (1991).
Financial Consumer Agency of Canada Act, S.C. 2001, c. 9, (Can.), http://laws-lois.justice.gc.ca/PDF/2001_9.pdf
[8] Fergus, D. (2018). Land of the Fee: Hidden Costs and the Decline of the American Middle Class. New York, NY: Oxford University Press.
[9] Smith, P., Babar, S., & Borné, R. (2020). Overdraft fees: Banks must stop gouging consumers during the COVID-19 crisis. Durham, NC: Center for Responsible Lending. https://www.responsiblelending.org/sites/default/files/nodes/files/research-publication/crl-overdraft-covid19-jun2019.pdf
[10] Consumer Financial Protection Bureau. (2021). CFPB research shows banks’ deep dependence on overdraft fees. Washington, DC: CFPB. https://www.consumerfinance.gov/about-us/newsroom/cfpb-research-shows-banks-deep-dependence-on-overdraft-fees/
[11] Boesch, D., & Phadke, S. (2021). When women lose all the jobs: Essential actions for a gender-equitable recovery. Washington, DC: Center for American Progress. https://www.americanprogress.org/article/women-lose-jobs-essential-actions-gender-equitable-recovery/
[12] Consumer Financial Protection Bureau. (2021). Data point: Checking account overdraft at financial institutions served by core processors. Washington, DC: CFPB. https://files.consumerfinance.gov/f/documents/cfpb_overdraft-core-processors_report_2021-12.pdf
[13] Klein, A. (2021, June 24). Overdraft fees are big money for small banks. Politico. https://www.politico.com/news/agenda/2021/06/24/bank-overdrafts-big-business-small-banks-495688
[14] California Reinvestment Coalition. (2014). How banks sell overdraft: Results of overdraft mystery shopping in four key states. San Francisco, CA: California Reinvestment Coalition, New Economy Project, Reinvestment Partners, and Woodstock Institute. https://woodstockinst.org/wp-content/uploads/2014/08/overdraft.pdf
[15] Pew Charitable Trusts. (2016). Consumers need protection from excessive overdraft costs. Washington, DC: Pew Charitable Trusts. https://www.pewtrusts.org/-/media/assets/2016/12/consumers_need_protection_from_excessive_overdraft_costs.pdf
[16] Consumer Financial Protection Bureau. (2016). 12 CFR Part 1041: Payday, vehicle title, and certain high-cost installment loans. Washington, DC: National Archives and Records Administration, Federal Register. https://www.regulations.gov/contentStreamer?documentId=CFPB-2016-0025-0001&contentType=pdf
[17] Campbell, D., Martínez-Jerez, F. A., & Tufano, P. (2012). Bouncing out of the banking system: An empirical analysis of involuntary bank account closures. Journal of Banking & Finance, 36, 1224–1235.
[18] The CFPB’s original rule issued in 2017 included prohibitions on extracting payments directly from borrowers’ bank accounts along with mandatory underwriting provisions. However, the final rule issued in 2020 did away with these consumer protections.
Consumer Financial Protection Bureau. (2020, July 7). The Consumer Financial Protection Bureau issues final rule on small dollar lending. Washington, DC: CFPB. https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-final-rule-small-dollar-lending/
Morgan, D., Strain, M., & Seblani, I. (2012). How payday credit access affects overdrafts and other outcomes. Journal of Money, Credit, and Banking, 44(2–3), 519–531. doi:10.1111/j.1538–4616.2011.00499.x
[19] Faber, J.W., & Friedline, T. (2020). The racialized costs of “traditional” banking in segregated America: Evidence from entry-level checking accounts. Race and Social Problems, 12, 344–361. https://doi.org/10.1007/s12552-020-09296-y
[20] Campbell, D., Martínez-Jerez, F. A., & Tufano, P. (2012). Bouncing out of the banking system: An empirical analysis of involuntary bank account closures. Journal of Banking & Finance, 36, 1224–1235.
[21] Legal scholar Mehrsa Baradaran’s research documents the historic and significant ways that banks have exploited Black and other racially marginalized communities and contributed to the yawning racial wealth divides.
Baradaran, M. (2017). The Color of Money: Black Banks and the Racial Wealth Gap. Cambridge, MA: Harvard University Press.
[22] Addo, F.R., & Darity, Jr., W. (2021). Disparate recoveries: Wealth, race, and the working class after the Great Recession. ANNALS of the American Academy of Political and Social Science, 695, 173–192.
[23] Hamilton, D., Darity, Jr., W., Price, A., Sridharan, V., & Tippett, R. (2015). Umbrellas don’t make it rain: Why studying and working hard isn’t enough for Black Americans. New York, NY: The New School, Duke Center for Social Equity, and INSIGHT Center for Community Economic Development. http://insightcced.org/wp-content/uploads/2015/08/Umbrellas_Dont_Make_It_Rain_Final.pdf
[24] Mian, A., & Sufi, A. (2014). House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again. Chicago, IL: University of Chicago Press.
[25] Castro, A.B., West, S., & Wood, A.K. (2019). Asset depletion, chronic financial stress, and mortgage trouble among older female homeowners. The Gerontologist, 59(2), 230–241. https://doi.org/10.1093/geront/gnx137
West, S., Castro, A.B., Ma, C., & Elliott, S. (2021). Reversing the gains of the Civil Rights and Women’s Movements: How housing strain and market exclusion led to wealth depletion during the Great Recession. Journal of the Society for Social Work and Research, 12(2), 263–282. https://doi.org/10.1086/714544
[26] Massey, D.S., Rugh, J.S., Steil, J.P., & Albright, L. (2016). Riding the stagecoach to hell: A qualitative analysis of racial discrimination in mortgage lending. City & Community, 15(2), 118–136.
[27] Nopper, T. (2010). Colorblind racism and institutional actors’ explanations of Korean immigrant entrepreneurship. Critical Sociology, 36(1), 65–85. https://doi.org/10.1177/0896920509347141
Ray, V. (2019). A theory of racialized organizations. American Sociological Review, 84(1), 26–53. https://doi.org/10.1177/0003122418822335
[28] Reuters. (2017, March 2). Banks paid $321 billion in fines since financial crisis: BCG. Reuters. https://www.reuters.com/article/us-banks-fines/banks-paid-321-billion-in-fines-since-financial-crisis-bcg-idUSKBN1692Y2
[29] Levitin, M. (2021, September 14). Occupy Wall Street did more than you think. The Atlantic. https://www.theatlantic.com/ideas/archive/2021/09/how-occupy-wall-street-reshaped-america/620064/
[30] Pew Research Center. (2011). Public divided over Occupy Wall Street movement. Washington, DC: Pew Charitable Trusts. https://www.pewresearch.org/politics/2011/10/24/public-divided-over-occupy-wall-street-movement/10-24-11-1/
Pew Research Center. (2011). Section 2: Occupy Wall Street and inequality. Washington, DC: Pew Charitable Trusts. https://www.pewresearch.org/politics/2011/12/15/section-2-occupy-wall-street-and-inequality/
[31] Remle, M. (2019). Kill the funding, kill the pipeline, divest the globe. Mazaska Talks. https://mazaskatalks.org/blog/2017/9/23/kill-the-funding-kill-the-pipeline-divest-the-globe-by-matt-remle
[32] Funes, Y. (2017, February 9). California city of Davis divests from Wells Fargo in DAPL protest. Colorlines. https://www.colorlines.com/articles/california-city-davis-divests-wells-fargo-dapl-protest
[33] Reyes, E.A. (2017, December 13). L.A. backs requirements that could freeze out Wells Fargo from city contract. Los Angeles Times. https://www.latimes.com/local/lanow/la-me-ln-banking-ordinance-20171212-story.html
[34] IPCC. (2022). Climate change 2022: Impacts, adaptation and vulnerability. Bremen, Germany: Intergovernmental Panel on Climate Change (IPCC). https://www.ipcc.ch/2022/02/28/pr-wgii-ar6/
[35] Shierholz, H. (2020, April 16). In the last four weeks, more than 20 million workers applied for unemployment insurance benefits. Washington, DC: Economic Policy Institute. https://www.epi.org/press/in-the-last-four-weeks-more-than-20-million-workers-applied-for-unemployment-insurance-benefits/
[36] Friedline, T., Wood, A.K., Wheatley, M., Oh, S., & Zheng, H. (2022). Doubling down on racial capitalism during COVID-19: Qualitative interviews with bank employees. The ANNALS of the American Academy of Political and Social Science, 698(1), 163–184.
[37] Consumer Financial Protection Bureau. (2021). Complaint bulletin: COVID-19 issues described in consumer complaints. Washington, DC: CFPB. https://files.consumerfinance.gov/f/documents/cfpb_covid-19-issues-described-consumer-complaints_complaint-bulletin_2021-07.pdf
[38] Fairlie, R., & Fossen, F.M. (2021). Did the Paycheck Protection Program and Economic Injury Disaster Loan Program get disbursed to minority communities in the early stages of COVID-19? Small Business Economics, 58, 829–842. https://doi.org/10.1007/s11187-021-00501-9
[39] In the FDIC’s 2009 report, the sample includes an estimated 4.23 million households that never owned a bank account and respondents could choose multiple answers. The percentage of respondents indicating trust as a reason is the same among the estimated sample of 3.14 million households that previously had a bank account. In the FDIC’s 2019 report, the sample of unbanked households represents approximately 7.1 million households. The percentages of trust for never banked and previously banked households were 38% and 35%, respectively.
Federal Deposit Insurance Corporation. (2009). FDIC national survey of unbanked and underbanked households. Alexandria, VA: FDIC. https://www.fdic.gov/analysis/household-survey/2009/2009report.pdf
Federal Deposit Insurance Corporation. (2020). How America banks: Household use of banking and financial services, 2019. Alexandria, VA: FDIC. https://www.fdic.gov/analysis/household-survey/2019report.pdf
[40] Brenan, M. (2021, July 14). Americans’ confidence in major U.S. institutions dips. Gallup. https://news.gallup.com/poll/352316/americans-confidence-major-institutions-dips.aspx and https://news.gallup.com/file/poll/352322/210714Confidence.pdf. Some point to the University of Chicago Booth and Kellogg School Financial Trust Index (FTI) as a measure of trust in private institutions, including banks. The FTI finds that trust in banks hovers between 30% and 40%, which indicates that 60% to 70% of U.S. adults do not trust banks consistent with the Gallup survey report.
[41] Piketty, T. (2014). Capital in the Twenty-First Century. Cambridge, MA: The Belknap Press of Harvard University Press.
[42] Morduch, J., & Schneider, R. (2017). The Financial Diaries: How American Families Cope in a World of Uncertainty. Princeton, NJ: Princeton University Press.
[43] Gilliard, C. (2019). “Banking on Your Data.” Washington, DC: Testimony to the U.S. House Financial Services Committee Hearing on Banking on Your Data: The Role of Big Data in Financial Services. https://financialservices.house.gov/uploadedfiles/hhrg-116-ba00-wstate-gillardc-20191121.pdf
[44] Federal Deposit Insurance Corporation. (2014). 2014 FDIC national survey of unbanked and underbanked households. Alexandria, VA: FDIC. https://www.fdic.gov/analysis/household-survey/2013/2013report.pdf
[45] Pasquale, F. (2015). The Black Box Society: The Secret Algorithms that Control Money and Information. Cambridge, MA: Harvard University Press.
[46] Friedline, T. (2021). Banking on a Revolution: Why Financial Technology Won’t Save a Broken System. New York, NY: Oxford University Press.
[47] Cagle, S. (2018, August 20). Why is Bank of America asking clients about their citizenship? The Nation. https://www.thenation.com/article/archive/why-is-bank-of-america-asking-clients-about-their-citizenship/
[48] Browne, S. (2015). Dark Matters: On the Surveillance of Blackness (pp. 16–17). Durham, NC: Duke University Press.
[49] Gilliard, C. (2019). “Banking on Your Data.” Washington, DC: Testimony to the U.S. House Financial Services Committee Hearing on Banking on Your Data: The Role of Big Data in Financial Services. https://financialservices.house.gov/uploadedfiles/hhrg-116-ba00-wstate-gillardc-20191121.pdf
[50] In addition to competition from fintech companies, industry consultants also frame overdraft fees as an unstable source of revenue given potential oversight from regulators and the Consumer Financial Protection Bureau (CFPB). According to a 2021 quote from Novantas, a financial industry research and consulting firm, “The CFPB nominee, Rohit Chopra, is at the core of the two priorities [fair access to credit and unfair fees]. With his extensive background in consumer protection within banking, the CFPB is likely to push for credit policy reform, more progressive lending criteria and an overhaul of overdraft fees.”
Streeter, B. (2021, March 18). What’s the future of overdrafts? The Financial Brand. https://thefinancialbrand.com/110631/future-overdrafts-banking-checking-payday-neobank-fintech/
[51] Friedline, T. (2022, January 12). Banks and tech companies jockey for economic control. The American Prospect. https://prospect.org/economy/banks-tech-companies-jockey-for-economic-control/
[52] Streeter, B. (2021, March 18). What’s the future of overdrafts? The Financial Brand. https://thefinancialbrand.com/110631/future-overdrafts-banking-checking-payday-neobank-fintech/
[53] Moebs Services overdraft revenue estimates are typically substantially higher (double or more) than the amounts reported by the Consumer Financial Protection Bureau (CFPB) or The Federal Financial Institutions Examination Council (FFIEC). This may be due to Moebs’ overdraft estimates including a wider range of data, “fees for the overdraft itself, an NSF fee, and fees for stop payment, the return of the deposited item, plus the transfer from a deposit account or a line of credit.”
[54] Board of Governors of the Federal Reserve System. (2021). 2019 interchange fee revenue, covered issuer costs, and covered issuer and merchant fraud losses related to debit card transactions. Washington, DC: Federal Reserve System. https://www.federalreserve.gov/paymentsystems/files/debitfees_costs_2019.pdf
