Georgia Senator Raphael Warnock pushes to end overdraft fees from banks

ATLANTA — Each year, banks make billions of dollars in overdraft fees, and now one Georgia lawmaker is pushing to end them.

Georgia Senator Raphael Warnock told Channel 2 Consumer Investigator Justin Gray that his effort is to pressure banks to take action, and some of the biggest banks are already making major changes.

[DOWNLOAD: Free WSB-TV News app for alerts as news breaks]

While the banks are not eliminating all fees, they are making changes that they say will better protect consumers from high fees.

Gwinnett County College student Monique McCaniel says while trying to work her way through college with low wage jobs, overdraft fees piled up.

“It got to the point where I had so many overdraft fees they closed my account,” McCaniel said. “How do you catch up when you are getting penalized for being behind or how do you catch up when you don’t even have enough money in your paycheck to not be penalized.”

Warnock chaired his senate hearing this week exploring ending overdraft fees. He wrote letters to major banks pushing them to get rid of the fees. According to the Consumer Financial Protection Bureau, in 2019, banks earned more than $15 billion from overdraft fees.

“It’s one more example of the ways in which it’s expensive to be poor, and it’s difficult to be an ordinary person just trying to make your life work,” said Warnock.

Some banks have already eliminated overdraft charges. Capitol One sent a letter to employees last year announcing it would be the first major bank to end all overdraft and insufficient funds fees.

Wells Fargo said they have added a 24-hour grace period for fees. Truist said this summer they are launching a new checking account with no overdraft fees and a $100 negative balance buffer.

TRENDING STORIES:

An industry spokesperson testified before the senate that overdraft fees are actually good for some customers.

“Knowing using an overdraft product creates a situation where a consumer can get that gas or get the groceries that they need to use, but they have to affirmatively opt in to do so first,” said the spokesperson.

Warnock says the data shows that it’s just 9% of banking customers who account for more than 8% of those fees.

“It’s the most vulnerable people. It’s the same folks who are exploited by the rent to own outfits,” said Warnock.

Big banks say without overdraft protection and fees, some customers could have no way to pay some bills. But critics disagree and say those fees are just easy money for these banks.

[SIGN UP: WSB-TV Daily Headlines Newsletter]

IN OTHER NEWS: