Predatory banks rake in billions of dollars in overdraft fees from their poorest customers every year. The Consumer Financial Protection Bureau is trying to put a stop to it (via PitchforkEcon)
across different types of credit and debits" to increase customers' chances of incurring the highest overdraft fee possible.
If you're a middle-class American with three months' worth of emergency savings on hand and automatic overdraft protection on your, this all might sound unbelievable, like a missive from an alien planet. That's because these exploitative overdraft fees are targeted to affect only a small portion of banking customers—specifically, the poorest few. The CFPB estimates that fewer than ten percent of all bank customers are responsible for nearly 80 percent of all overdraft fees.
Fairbank didn't comment on why it took Capital One many years to finally decide to honor the"humanity" of its customers by eliminating overdraft fees. But it's most likely not a coincidence that the bank's action happened at the same time that the CFPB started to crack down on the practice. Chopra praised Capital One for the move, but said his agency wasn't going to wait for other large financial institutions to follow suit of their own free will. Instead, he said the CFPB"will be considering a range of regulatory interventions to help restore meaningful competition in this market, rather than allowing large institutions to rely on junk fees forever."
Unfortunately, overdraft fees aren't the only way that financial institutions prey on poor people in America. Even setting aside the payday loan industry, some of the largest and most reputable banks in the nation continue to penalize customers for not meeting
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