Source: United States Senator for New Jersey Bob Menendez
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Banking, Housing, and Urban Affairs Committee today questioned the CEOs of Wells Fargo & Company, Bank of America, JPMorgan Chase, Citigroup, Truist, U.S. Bancorp and PNC on the effects of overdraft fees on low-income and minority communities and called for their elimination as part of the committee’s yearly oversight hearing of the largest banks in the U.S.
“A 2021 report by the Financial Health Network found that nearly 60% of all overdraft fees in 2020 were paid by low and moderate-income households and 25% were paid by Latino households specifically,” said Sen. Menendez. “Your banks made $64 billion collectively last quarter, so it’s clear to me that there is no reasonable explanation to charge overdraft fees on working families.”
[embedded content]
Sen. Menendez also pressed the bank CEOs about what the financial institutions are doing, if anything, to protect consumers from Zelle-related fraud and scams.
“I’ve heard story after story from New Jersey constituents who have fallen victim to scams and fraud on Zelle, and in many instances, banks have denied their customers relief,” added Sen. Menendez. “It’s clear that consumers are slipping through the cracks of Regulation E, and detailed information from the banks will tell us what needs to be done to strengthen it. Your banks created this tool and it is your responsibility to make sure it is safe to use.”
The Senator concluded by pushing Wells Fargo CEO Charles Scharf on why the bank has disproportionately rejected refinancing applications from African-American and Hispanic homeowners, and questioned the other banks on why they fail to encourage more minority borrowers to go through the full refinancing application process.
“Mr. Scharf, in March Bloomberg reported that Wells Fargo disproportionately rejected refinancing applications from African-American and Hispanic homeowners. You and I had an opportunity [to meet] and one of the things you told me in response to my questions was partially due to the fact that Wells encourages more minority borrowers to go through the full application process while some of your competitors turn them away at an earlier stage”, concluded Sen. Menendez. “The Latino community [has a] $2 trillion domestic marketplace impact already and it will continue to grow exponentially, but it needs to be treated fairly in the process.”
Sen. Menendez has been a leader in the fight to hold the financial industry accountable. In July, Sen. Menendez led a letter to the banks that own Zelle’s parent company – including J.P. Morgan, Chase & Co., Bank of America, and Wells Fargo – pressing them for more information about what, if anything, the financial institutions are doing to protect consumers from fraud and scams on Zelle. Sen. Menendez has also long led the charge in the Senate for consumer protections – ranging from banks, data breach protections for consumers, to cyber security, and more. In 2014, Sen. Menendez crafted legislation following the monumental Target data breach in 2013, where he called on the Federal Trade Commission (FTC) to protect American consumers.
###