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Floor Speech

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Mr. BOOKER. Mr. President, this is an overdraft speech. It is about a commonsense rule that lowers costs for millions and millions of Americans, while carefully targeting, really, the most egregious abusive overdraft practices in the financial industry today.

Banks have long offered overdraft services to allow their customers to make purchases or even pay a bill, even if they lack sufficient funds in their account, while sometimes charging a fee for this service. But in recent years, banks have exploited this practice, charging customers billions of dollars in deceptive fees. A recent study found that more than half of all the people who overdraw their checking accounts and paid a fee could not recall consenting to the overdraft service for which they are being charged.

Moreover, we know the customers who are being charged overdraft fees are overwhelmingly folks who are low-income, who work really hard and don't get that much pay, and a $20 overdraft fee just further pushes them into a financial trap, into this cycle downward of financial instability that is hard to pull out of.

Too often, banks have been found trying to game the system, and this is really problematic. They try to game the system to impose fees on customers--even when they shouldn't be charged in the first place--by orchestrating transactions improperly or delaying deposits customers make into their accounts.

Just think about this. They can time your deposit with the time it hits your account. You think you can deposit a check and pull money out, but the way they rig the system is to create a gap in which you are actually in overdraft when technically you have already made that deposit.

Meanwhile, these fees generated enormous amounts of revenue for banks while most customers don't even know they have opted into this system.

Opponents of the rule argue that it could restrict access to emergency credit. We all are supporters of this idea of emergency credit. They think that this is an example, they say, of government overreach and that it is going to hurt banks' revenue model. Let's be honest. This isn't about protecting consumers; it is about protecting this massive, new profit line for big banks.

For years, I have fought against what is a predatory practice. I have introduced legislation to crack down on exploitative overdraft fees that banks charge consumers when they make a purchase or pay a bill that they don't have sufficient funds for in their account, trying to stop the games that banks play to make it more difficult for people to avoid the overdraft fees in the first place.

The Consumer Financial Protection Bureau has been instrumental in cracking down on banks charging surprise overdraft fees, and many banks have said ``You are right. This is a bad practice. We should stop'' but not all of them. So last year, the CFPB finalized this rule to curb illegal and predatory practices. The rule lowered most big-bank overdraft fees from $35 to $5, saving consumers in America--American hard-working citizens--saving them $5 billion a year. On average, it delivered $225 a year in savings for the average household. Think about this. It is about protecting households. There is still a consequence if you overdraft, but it can't be these usury rates.

The overdraft rule did not ban overdraft fees outright or go after small community banks and credit unions, which were exempted from the rule. It simply requires banks to either reduce their rates or comply with Federal banking laws when charging high credit fees.

Several financial institutions that I have mentioned, like Capital One and Citibank, have already eliminated overdraft fees and continue to provide overdraft protection. They are showing, to their credit, that it can be done and not somehow mess up their business model. You don't need to take advantage of consumers to make money. Meanwhile, though, Wells Fargo and JPMorgan Chase each earn over $1 billion a year in overdraft and NSF fees--nearly four times more than the next highest bank.

Some banks are showing ``You know what, we don't want to jerk over the customers,'' while others, to the tune of over $1 billion a year, are still taking advantage of some of our most vulnerable and financially fragile Americans, who are working hard every day to try to get out of poverty traps, yet banks take advantage of them and send them back.

Perhaps most egregiously, in 2024, Navy Fed took nearly as much as the biggest banks from its servicemembers, veterans, and other customers. They took $725 million despite a dramatically smaller customer base, clearly showing that they were trying to take advantage of our veterans, our servicemembers, and others. Who will stand up for them? Who will say ``You are not going to do predatory practices on our servicemembers, on our veterans''--dramatically more than other banks that eliminated these practices.

For those who are most affected by overdraft fees--those folks living paycheck to paycheck, who are part of the 64 percent of Americans who live paycheck to paycheck and are often minutes to hours away from having the money necessary to cover expenses that lead to overdraft fees--this rule is a lifeline to them and their families.

I was proud that New Jerseyans wrote in to the CFPB sharing how these predatory practices were impacting them. Allow me to read from a New Jerseyan from East Orange, my neighbor. They wrote:

[M]y account was closed with no notice due to a merchant charging my account into the overdrafts. I've complained . . . for weeks about said situation. Nothing was ever done. A [$4,300] deposit was released--

By the bank--

but due to account closing, I currently have no access to funds which were released.

One anonymous servicemember from Carteret, NJ, wrote:

I am writing to file a complaint against Navy Federal Credit Union regarding multiple overdraft fees I have incurred. Despite having sufficient funds when transactions were authorized, I was charged due to lagged posting of charges and credits. This issue aligns with the recent CFPB findings . . . for similar practices where transactions settled with insufficient balances despite initially available funds. I believe these practices are unfair and I request an investigation into my account transactions.

This is a New Jerseyan who is playing by the rules who is frustrated because of practices that are clearly predatory and that take advantage of folks who are living paycheck to paycheck, and they are a servicemember.

Another servicemember from Manchester Township was erroneously charged and then overdrawn from his business account from Wells Fargo.

The extra $210 that was withdrawn from my account, including the original withdrawals and the overdraft fees, caused a cascade effect that has led to $1,100 in overdraft fees [this] year. I had called Wells Fargo twice to ask for help in stopping these increasing overdraft fees. They reimbursed me for 2 overdraft fees--$70. I was told that they were only allowed to reverse 2 overdraft fees a year. They also told me there was nothing else they could do to help me. The overdraft fees of $1,100 over the last 2 months have caused me a tremendous financial burden. As of today's date, I am still being charged overdraft fees. I don't know what to do, and Wells Fargo has refused to help me. I will probably close my account with Wells Fargo, however, it is a nightmare trying to change all the insurance companies that I receive payments from.

Here is a servicemember, a small business person, getting screwed over because they don't have the protection this rule would provide.

To rescind this rule in order to further enrich a small handful of abusive banks and their shareholders that allow this to happen at the expense of working families, at the expense of veterans, at the expense of servicemembers, is despicable.

This body shouldn't be on the side of big banks and their further enrichment; they should be on the side of veterans and servicemembers and Americans struggling, working paycheck to paycheck, especially when certain banks have shown they don't need these usury fees to make enormous profits. Where is the moral value in that?

Instead of lowering prices and protecting consumers, I now see Members of this body who I know the values they speak to. Some of my colleagues on the Senate Republican side want to raise these prices on Americans and allow these banks to prey upon servicemembers, veterans, and working Americans. This is all while the President and Elon Musk have continued their onslaught and attack on the Consumer Financial Protection Bureau, which has returned billions of dollars to American consumers.

The Consumer Financial Protection Bureau was created in the aftermath of the 2008 crisis to protect Americans from predatory practices and fight discriminations in the financial sector.

I wasn't here in Washington, but when the banks needed a bailout, we were here for the banks. I don't know if we charged them overdraft fees, but are we going to stand up for consumers now?

The CFPB has returned to the American consumers $19.7 billion in compensation, canceled debt, and other relief--$19.7 billion. I know firsthand the difference that the work of this Agency has made for American families. I saw it in my time as a young lawyer taking on slumlords in Newark. Hard-working people who could barely afford rent, who worked 50, 60 hours a week, barely affording rent, fighting to put food on the table for their kids, and one improper practice at a bank can throw them into financial crisis--predatory practices, scams, exploitation, which some banks have stopped doing.

I don't understand that this is even an issue here. This rule is to help consumers. This rule is to help veterans. This rule is to help servicemembers. This rule is to help the Americans who are struggling because the top 50 percent of our country has done extraordinarily well in the last economies under Republican and Democratic Presidents, but the data is clear that the bottom 50 percent of our country is working harder and making less. And we want to advantage the big banks that have record corporate profits.

I won't back down from this fight to save the CFPB, to save those who fight to defend consumers from being screwed over by big institutions. Look, I know what it is like in my family story to fight. I know what it is like to be up against insurmountable odds from my family stories. I know what it is like to be searching for someone who will stand up for you when you are doing everything right in this country, when you are working hard, when you are playing by the rules, when you are serving in your community, when you are coaching Little League, when you are trying to help on your block. I know what it is like, when you are volunteering at your church, to turn around and have some big, impersonal, distant bank screw you for their profits.

It is time for this body to do the right thing. This is not political. This is not partisan. This is, who do you stand for? At a time when people are cynical about all of Congress--they don't feel like anybody is fighting for them--who is going to stand up today and say: I fight for the little guy. I fight for the small business. I fight for the working servicemember.

Who is going to stand up? Who is going to stand up?

I know where I stand, and I encourage my colleagues to preserve this rule that stops predatory big banks from savaging the financial lives of too many Americans.

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