The bank has agreed to pay $97 million in customer restitution and a $25 million fine to settle allegations by the Consumer Financial Protection Bureau that it deceptively charged overdraft fees for certain ATM and debit card transactions.
The bank’s Asia-Pacific chief backs law giving greater mainland control over the territory; the Center for Responsible Lending said big banks took in almost $12 billion in overdraft fees last year, with the bulk of it paid by lower-income customers.
Some bankers, economists, policy experts and even Mark Cuban say that creative uses of overdraft programs could be lifelines for consumers and businesses whose finances have been upended by the coronavirus crisis.
The billionaire investor and entrepreneur sees problems with small businesses having to apply for loans to get coronavirus relief. He says a more efficient approach would be to let them run negative balances on their bank accounts.
In some cases, financial institutions are required by court order to divert funds to private creditors. But the industry has added its voice to a consensus for a legislative update to ensure Americans receive their full amount.
The two large banks are holding off for a month on collecting on negative balances to ensure that customers receive the full amount of government payments deposited into their accounts.
Republicans balked at measures like an overdraft fee ban and interest rate cap in the recent stimulus bill, but Sen. Sherrod Brown, D-Ohio, isn’t done trying to add such proposals to future relief packages.
If Capitol Hill plans another round of stimulus, Democrats could have more leverage to demand steps such as suspending overdraft fees or placing a temporary cap on consumer lending rates.
Motivated by entrepreneur Mark Cuban, Citizens Bank of Edmond is offering an overdraft line to give customers quick access to cash they will eventually receive from the federal government.
Corporations have tapped more than $124 billion in lines in the past three weeks; rating agency says virus “could wipe out a full year of U.S. banking profits.”
