The coronavirus pandemic is expected to deal a massive blow to jobs, especially in the restaurant and retail industries, where many workers are already living paycheck to paycheck. A standard $35 overdraft fee could put already vulnerable consumers on the “brink into financial ruin” Booker said in a statement in August 2018 when he and Brown introduced legislation to limit overdraft fees.
Consumer advocacy groups, such as the Center for Responsible Lending, have pointed to pausing overdraft fees as a way to soften the economic fallout of the coronavirus emergency.
According to research from the Pew Charitable Trusts, overdraft fees, which are making up a growing source of bank revenue, can have the heaviest impact on some of the most financially vulnerable consumers who might not even know they’ve opted into an overdraft program.
The issue has been debated in Washington during the Trump administration, with the Consumer Financial Protection Bureau saying in May 2019 that it was reviewing a rule that limits banks’ ability to charge the fees without a customer’s permission.
Bank regulators have encouraged financial institutions to waive these fees during the coronavirus emergency, and some, such as Ally Financial Inc., have announced that they will do so for existing customers. Bank of America Corp. has said it will refund overdraft fees, non-sufficient funds fees and monthly maintenance fees upon request for banking and small business customers.
