During remarks on the Senate floor Wednesday, Sen. Cory Booker (D-NJ) spoke about Republican efforts to remove CFPB protections.
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00:00This is a overdraft speech.
00:04It's about a common-sense rule that lowers costs for millions and millions of Americans,
00:11while carefully targeting really the most egregious, abusive overdraft practices
00:18in the financial industry today.
00:20Banks have long offered overdraft services to allow their customers to make purchases
00:25or even pay a bill, even if they lack sufficient funds in their account,
00:30while sometimes charging a fee for this service.
00:34But in recent years, banks have exploited this practice,
00:38charging customers billions of dollars in deceptive fees.
00:43A recent study found that more than half of all the people who overdraw their checking accounts
00:49and paid a fee could not recall consenting to the overdraft service for which they're being charged.
00:55Moreover, we know that customers who are being charged overdraft fees
01:00are overwhelmingly folks who are low-income, who work really hard, don't get that much pay,
01:06and a $20 overdraft fee just further pushes them into a financial trap,
01:14into this cycle downward of financial instability that's hard to pull out of.
01:21Too often, banks have been found trying to game the system, and this is really problematic.
01:27They try to game the system to impose fees on customers,
01:31even when they shouldn't be charged in the first place,
01:34by orchestrating their transactions,
01:37by improperly or delaying deposits customers make to make into their accounts.
01:45So just think about this.
01:46They can time your account by the time it hits your practice.
01:49You think you deposit a check, pull money out,
01:52but the way they rig the system is to create a gap in which you are actually in overdraft
01:57when technically you've already made that deposit.
02:01Meanwhile, these fees generated enormous amounts of revenues for banks,
02:07while most customers don't even know they've opted into this system.
02:13Opponents of the rule argue that it could restrict access to emergency credit.
02:18We all are supporters of this idea of emergency credit.
02:22They think that this is an example, they say, of government overreach
02:26and that it's going to hurt banks' revenue model.
02:28But to be honest, this isn't about protecting consumers for them,
02:32it's about protecting this massive new profit line for big banks.
02:38For years, I have fought against what is a predatory practice.
02:44I've introduced legislation to crack down on exploitative overdraft fees
02:48that banks charge consumers when they make a purchase or pay a bill
02:53that they don't have sufficient funds for in their account.
02:56Trying to stop the games that banks play
03:00to make it more difficult for people to avoid the overdraft fees in the first place.
03:06Now, the Consumer Finance Protection Bureau has been instrumental
03:09in cracking down on banks charging surprise overdraft fees,
03:13and many banks have said, you're right, this is a bad practice, we should stop.
03:17But not all of them.
03:20So last year, the CFPB finalized this rule to curb illegal and predatory practices.
03:28The rule lowered most big bank overdraft fees from $35 to $5,
03:35saving consumers in America, American hardworking citizens,
03:40saving them $5 billion a year.
03:44On average, it delivered $225 a year in savings for the average household.
03:52Think about this.
03:54It's about protecting households.
03:56There's still a consequence if you overdraft, but it can't be these usury rates.
04:01The overdraft rule did not ban overdraft fees outright,
04:05or go after small community banks and credit unions,
04:09which were exempted from the rule.
04:12It simply requires banks to either reduce their rates
04:17or comply with federal banking laws when charging high credit fees.
04:24Several financial institutions that I've mentioned,
04:27like Capital One and Citibank, have already eliminated overdraft fees
04:32and continue to provide overdraft protection.
04:37They're showing to their credit that it can be done
04:41and not somehow mess up their business model.
04:44You don't need to take advantage of consumers to make money.
04:50Meanwhile, though, Wells Fargo and JPMorgan Chase
04:54each earn over $1 billion a year in overdraft and NSF fees,
05:00nearly four times more than the next highest bank.
05:07Banks are showing, you know what, we don't want to jerk over the customers,
05:12while others, to the tune of over $1 billion a year,
05:16are still taking advantage of some of our most vulnerable
05:19and financially fragile Americans who are working hard every day
05:23to try to get out of poverty traps,
05:25yet banks take advantage of them and send them back.
05:31Perhaps most egregiously, in 2024,
05:34Navy Fed took nearly as much as the biggest banks
05:38in its service member, veteran, and other customers.
05:42They took $725 million despite a dramatically smaller customer base,
05:48clearly showing that they were trying to take advantage of our veterans,
05:53of our service members, and others.
05:56Who will stand up for them?
05:57Who will say you are not going to do predatory practices
06:02on our service members, on our veterans,
06:07dramatically more than other banks who eliminated these practices?
06:13For those who are most affected by overdraft fees,
06:16those folks living paycheck to paycheck,
06:18who are part of the 64% of Americans who live paycheck for paycheck,
06:24and are often minutes to hours away from having the money necessary
06:28to cover expenses that lead to overdraft fees,
06:32this rule is a lifeline to them and their families.
06:39Now, I was proud that New Jerseyans wrote into the CFPB,
06:43sharing how these predatory practices were impacting them.
06:46Allow me to read from a New Jerseyan from East Orange, my neighbor.
06:52They wrote, my account was closed with no notice
06:55due to a merchant charging my account into the overdrafts.
07:00I've complained for weeks about the said situation.
07:04Nothing was ever done.
07:06A $4,300 deposit was released by the bank account.
07:12Due to account closing, I currently have no access to the funds that were released.
07:21One anonymous service member from Carteret, New Jersey, wrote,
07:25I am writing to file a complaint against Navy Federal Credit Union
07:30regarding multiple overdraft fees I've incurred.
07:34Despite having sufficient funds when the transactions were authorized,
07:39I was charged due to lagged posting of charges and credits.
07:45This issue aligns with the recent findings of the CFPB.
07:49For similar practices, where transactions settled with insufficient balances
07:55despite initially available funds,
07:57I believe these practices are unfair,
08:01and I request an investigation into my account transactions.
08:05This is a New Jerseyan who's playing by the rules,
08:10who's frustrated because of practices that are clearly predatory
08:14and that take advantage of folks who are living paycheck to paycheck.
08:19And there are a service member.
08:22Another service member from Manchester Township was erroneously charged
08:27and then overdrawn from his business account from Wells Fargo.
08:33The extra $210 that was withdrawn from my account,
08:37including the original withdrawals and overdraft fees,
08:41caused a cascade effect that led to $1,100 in overdraft fees this year.
08:49I called Wells Fargo twice to ask for help in stopping these increasing overdraft fees.
08:56They reimbursed me for two overdraft fees, $70.
09:01I was told that they were only allowed to reverse two overdraft fees a year.
09:07They also told me there was nothing else they could do to help me.
09:10The overdraft fees of $1,100 over the last two months have caused me tremendous financial burden.
09:18As of today's date, I'm still being charged overdraft fees.
09:23I don't know what to do, and Wells Fargo has refused to help me.
09:28I will probably close my account with Wells Fargo.
09:31However, it's a nightmare trying to change all the insurance companies that I receive payment for.
09:39There's a service member, a small business person,
09:44getting screwed over because they don't have the protection that this rule would provide.
09:51To rescind this rule in order to further enrich a small handful of abusive banks
10:00and their shareholders, which allow this to happen at the expense of working families,
10:06at the expense of veterans, at the expense of our service members,
10:11this is despicable, and this body shouldn't be on the sides of big banks and their further enrichment.
10:18They should be on the side of veterans and service members
10:21and Americans struggling working paycheck to paycheck,
10:24especially when certain banks have shown they don't need these usury fees to make enormous profits.
10:34Where's the moral value in that?
10:38Instead of lowering prices and protecting consumers,
10:42I now see members of this body who I know the values they speak to.
10:48Some of my colleagues on the Senate Republican side want to raise these prices on Americans
10:53and allow these banks to prey upon service members, veterans, and working Americans.
11:00And this is all while the president and Elon Musk have considered their onslaught an attack
11:07on the Consumer Finance Protection Bureau,
11:11which has returned billions of dollars to American consumers.
11:15This Consumer Financial Protection Bureau was created in the aftermath of the 2008 crisis
11:22to protect Americans from predatory practices and fight discrimination in the financial sector.
11:28I wasn't here in Washington, but when the banks needed a bailout,
11:34we were here for the banks.
11:38I don't know if we charged them overdraft fees,
11:43but are we going to stand up for consumers now?
11:49$19.7 billion dollars the CFPB has returned to the American consumers
11:55in compensation, canceled debt, and other relief.
11:59$19.7 billion dollars.
12:02I know firsthand the difference that the work of this agency has made for American families.
12:09I saw it in my time as a young lawyer taking on slumlords in Newark.
12:15Hardworking people who could barely afford rent, work 50, 60 hours a week,
12:20barely affording rent, fighting to put food on the table for their kids,
12:24and one improper practice at a bank can throw them into financial crisis.
12:35Predatory practices, scams, exploitation, which some banks have stopped doing.
12:43I don't understand that this is even an issue here.
12:47This rule is to help consumers.
12:49This rule is to help veterans.
12:51This rule is to help service members.
12:53This rule is to help the Americans that are struggling.
12:55Because the top 50% of our country has done extraordinarily well
13:00in the last economies under Republican and Democratic presidents,
13:03but the data is clear, the bottom 50% of our country is working harder and making less.
13:10And we want to advantage the big banks that have record corporate profits.
13:15I won't back down from this fight to save the CFPB,
13:19to save those who fight to defend consumers from being screwed over from big institutions.
13:25Look, I know what it's like in my family story to fight.
13:29I know what it's like to be up against insurmountable odds for my family stories.
13:34I know what it's like to be searching for someone who will stand up for you
13:38when you're doing everything right in this country,
13:40where you're working hard, where you're playing by the rules,
13:43where you're serving in your community, when you're coaching Little League,
13:46when you're trying to help on your block.
13:48I know what it's like when you're volunteering at your church
13:50to turn around and have some big, impersonal, distant bank screw you for their profits.
13:59It's time for this body to do the right thing.
14:01This is not political, this is not partisan, this is who do you stand for.
14:07At a time where people are cynical about all of Congress,
14:11they don't feel like anybody's fighting for them,
14:13who's going to stand up today and say,
14:16I fight for the little guy.
14:19I fight for the small business.
14:21I fight for the working service member.
14:23Who's going to stand up?
14:25Who is going to stand up?
14:27I know where I stand, and I encourage my colleagues
14:32to preserve this rule that stops predatory big banks
14:39from savaging the financial lives of too many Americans.
14:44To the distinguished president, I yield the floor.