Richmond, Va.— After the CFPB introduced an important new rule to stop financial institutions from punishing hard working families, Virginia Organizing Chairperson Lily Hungarland released the following statement:
“Thanks to the CFPB, the new overdraft rule will help Virginians, especially financially insecure households, by preventing banks from profiting from times when we are already unable to pay our bills.
“Overdraft fees add up to billions of dollars each year, and most of that comes from households at the bottom of the economy. It’s a terrible way for a market to work – on surprise fees charged when someone is already short.
“As the CFPB explains, the banks would like to have it both ways – they will contend that overdraft allows people to make ends meet when they are low on funds – but also that overdraft is not a form of credit, subject to TILA disclosures and protections against ‘fee harvesting.’ When banks apply an expensive overdraft fee, it should be considered a form of credit, the fee should be a finance charge, all subject to the regulations for credit.
“Profiting off of financial insecurity is not a type of banking that serves hard-working people and communities. We want a system where banks benefit from helping people build wealth. It is a privilege to have a banking charter, not a license to rip people off.”
For more information or to interview a spokesperson for Virginia Organizing, please contact Rosemary Gould at 434-962-7261 or email@example.com.