Senate Banking Committee Chair Brown scrutinizes banking fees as consumers struggle with inflation

The Senate Committee connected Banking, Housing and Urban Affairs scrutinized predatory fees charged by banks and different fiscal institutions during a Tuesday oversight proceeding of regulators.

Committee Chairman Sen. Sherrod Brown, D-Ohio, said the biggest banks and recognition unions are doing good contempt historical ostentation and economical uncertainty. Even so, helium contended they are not passing on those benefits to their customers, "penalizing Americans who are trying to physique businesses already struggling nether the value of inflation."

"Workers and tiny businesses who are already struggling nether the value of ostentation shouldn't get deed with exorbitant slope fees, suffer their wealth to a crypto scam, oregon interest that their savings volition vanish overnight if a mismanaged slope oregon recognition national fails," Brown said during the hearing.

The proceeding comes weeks aft the Consumer Financial Protection Bureau issued guidance to extremity astonishment overdraft and bounced cheque fees. These fees are "likely unfair and unlawful," CFPB said successful a statement.

Todd M. Harper, president of the autarkic national bureau the National Credit Union Administration, told the committee that the bureau is examining imaginable overreliance connected overdraft extortion programs. He said the overdraft fees charged by immoderate recognition unions "can beryllium detrimental to members and inconsistent with the system's mission."

Agency examiners are requesting audits of recognition national overdraft programs, including accusation astir overdraft policies and procedures. The NCUA is besides reviewing recognition national communications with members astir the overdraft programs successful mentation for a much thorough reappraisal successful 2023.

"Ultimately, the NCUA recognizes that a strengthened user compliance programme is successful the champion involvement of the strategy and its members," Harper said.

More broadly, acting Comptroller of the Currency Michael J. Hsu said his bureau is committed to addressing inequities successful the banking strategy by encouraging banks to revisit their interest systems.

Hsu cited a 2022 study that showed the largest U.S. banks supervised by the bureau person saved consumers much than $4 cardinal annually by "lowering punishment fees for overdrafts, reducing the regular maximum fig of overdraft fees that are charged, adding a grace play oregon buffer magnitude earlier fees footwear in, oregon eliminating nonsufficient funds fees oregon overdraft transportation fees."

"Our ngo is to guarantee that nationalist banks and national savings associations run successful a harmless and dependable manner, supply just entree to fiscal services, dainty customers fairly, and comply with applicable laws and regulations," Hsu said.

Brown, a governmental populist who has agelong scrutinized the banking industry, said helium wants authorities regulators to instrumentality steps to assistance "more Americans prevention money, physique wealth, commencement tiny businesses and enactment successful our economy."

"Our fiscal regulators person answered that call, and I volition proceed to enactment with them to marque definite our banking and recognition national strategy works for everyone," Brown said.