A review of 2019 data shows that big banks continue to collect over $11 billion in overdraft related fees each year. Banks engage in a number of abusive practices that combine to drain massive sums from their customers’ checking accounts. The large majority of these fees are shouldered by banks’ most vulnerable customers, often driving them out of the banking system altogether. Bank overdraft fees cause particular harm to low-income consumers and communities of color, who are already disproportionately excluded from the banking mainstream.

This report analyzes the 2019 overdraft-related revenue of banks with assets of $1 billion or more and reviews the overdraft practices of the 10 largest banks in the United States, as well as how they report handling overdraft fees during the COVID-19 crisis. As of mid-May, none of the 10 largest banks has committed to providing sustained relief from overdraft fees during the crisis.

Bank overdraft practices cause many families severe financial distress in the best of times. During the economic crisis caused by COVID-19, the devastating impact of overdraft fees will be only more pronounced. Congress, federal regulators, state regulators, and banks themselves should all ensure overdraft fees are suspended during the crisis—an outcome supported by over three-fourths of Americans polled in April 2020, including 84% of Democrats, 76% of Republicans, and 68% of independents.

Related Content