Senator Cory Booker (D-NJ) speaks during the confirmation hearing of Attorney General nominee Merrick Garland before the Senate Judiciary Committee, Washington, DC, February 22, 2021.
Al Drago Pool | Reuters
WASHINGTON – Sens. Cory Booker and Raphael Warnock asked the CEOs of 10 major banks to waive overdraft and insufficient funds charges that could cost some Americans more than $100 a day after the failure of Silicon Valley Bank and Signature Bank.
In a letter dated Tuesday, the New Jersey and Georgia Democrats asked the banks to help customers whose payments have been delayed or lost due to the collapse of SVB and Signature earlier this month. The letter is to the CEO of Wells Fargo, US Bank, Truist Financial Corporation, TD Bank, Regional Finance Company, PNC Bank, JP Morgan Chase, Huntington National Bank, People’s Bank and Bank of America.
“Disruption in the banking industry this month is disrupting consumers and jeopardizing the paychecks of millions of American workers,” wrote Booker, who sits on the Senate Committee on Small Business and Entrepreneurship, and Warnock.
The fee, which can be up to $111 per day for low account balances or up to $175 for low account fees, “causes a difficult financial situation for customers, especially when there is a lack of funds due to delays that have not yet occurred, which are not expected,” added the senators.
JPMorgan declined to comment. Other banks that received the letter did not immediately respond to requests for comment.
The Federal Deposit Insurance Corporation closed SVB on March 10 after the bank announced a loss of nearly $2 billion in asset sales. The agency said official SVB checks would continue to clear and assets would be accessible the next day.
Regulators shut down New York-based Signature Bank for days to prevent a potential banking crisis. Many of the assets have been sold to Flagstar Bank, a subsidiary of New York Community Bankcorp.
Booker and Warnock said banking customers whose payroll fell between March 10 and March 13 were unable to receive or check deposits from payroll banking providers with SVB and Signature Bank. He also noted that online merchants Etsy Customers are notified of late payments due to SVB’s payment processing.
The senators also cited an unrelated national technical issue on the 10th that resulted in missing payments and incorrect balances for Wells Fargo customers.
“The delay will hurt affected customers who are part of the sixty-four percent of Americans who live paycheck-to-paycheck, who are often ‘minutes to hours away from having the money they need to cover’ expenses that result in insufficient funds overdrafts. cost,” Booker and Warnock wrote.
They praised the measures taken by the Treasury and the FDIC to handle possible economic disasters by ensuring access to depositor funds over $250,000 FDIC-guaranteed threshold and creating new, one-year loans for financial institutions to protect deposits in hard times.
Treasury Secretary Janet Yellen, Tuesday, said the Treasury is ready to guarantee all deposits for financial institutions beyond SVB and Signature Bank if the crisis worsens.
“In line with the government’s swift and decisive response to help the businesses and individuals who were helped quickly to overcome the bank’s failure, we call on you to act quickly to prevent American families from unwanted and unnecessary costs,” the senator wrote.