Thread by @doctorow

As the big US banks tout their record-smashing financial results for the pandemic lockdown era, it's easy to assume that all those profits came as a result of Trump and McConnell's big-business bailout, but that's only part of the story.

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As @alex_sammon writes for @TheProspect, 12 of the 15 largest US banks owe a substantial fraction of their pandemic profits to overdraft fees - fees assessed against the poorest and most vulnerable bank customers.

prospect.org/economy/big-ba…

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How much money did the banks make on these fees? @ChaseSupport made $1.5b in 2020; @BankofAmerica made $1.1b, @WellsFargo made $1.3b - the most deadly months of the pandemic correspond to the highest overdraft rakes, with the big three pulling in $300m in Q4-2020.

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Who pays overdraft fees? The very, very poor. 78.3% of all overdraft fees come from just 9.2% of bank customers. They pay an average of $35 to punish them for not having enough money. These amount to loans with a 3,500% APR.

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As with so many American pathologies, the pandemic served as an accelerant for an pre-existing condition: the share of bank profits attributable to overdraft fees has climbed steadily since the Great Financial Crisis, hitting $11b in 2019.

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The banks have made empty noises telling customers that their overdraft fees might be eligible for a refund if they were "pandemic related" but these were just words - the reality is that the banks piled fees upon fees.

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All of this happened while the banks made $25 billion in commissions for handling the government's insured, risk-free PPP loans - and while the Fed suspended uncollateralized intraday credit limits and waived the banks' own overdraft fees.

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Those billions in public subsidy were pumped into socially useless stock buybacks, a practice that makes the very rich (especially bank executives) much, much richer, while making the banks themselves more fragile and liable to need more public money in the future.

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It's time for the Biden administration and Congress to act. The @CFPB has authority to reverse Trump's policy of permitting unlimited fee-gouging by banks, and the @FDICgov and @federalreserve could both act as well.

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Congress should revive @CoryBooker and @RepMaloney's proposals to rein in this usury.

As the pandemic recedes and we restructure the economy for the new century, we mustn't forget how the banks got vast public support and returned it by trampling their poorest customers.

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Image:

A.N. Mironov
en.wikipedia.org/wiki/File:%D0%…

CC BY-SA:
creativecommons.org/licenses/by-sa…

eof/

ETA - If you'd like an unrolled version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

pluralistic.net/2021/04/22/iho…