Banks have charged Lengthy Islanders an estimated $120 million in overdraft, ATM and upkeep charges for the reason that begin of the pandemic, compounding the financial hardships skilled by low-income residents, based on a report issued by a coalition of progressive teams Wednesday.
The evaluation, launched by the NYS Community Equity Agenda — comprised of neighborhood, labor, civil rights, and financial justice teams — estimates that banks statewide exacted greater than $1.6 billion in charges from New Yorkers since March 2020. Lengthy Island was hit the second hardest amongst areas statewide, behind New York Metropolis.
“It is horrifying to consider the individuals … that could not get meals on their desk; that the bottom earnings individuals who have been positively the toughest hit by the pandemic have been then hit by the banks,” stated Lisa Tyson, director of the Lengthy Island Progressive Coalition.
What to know
The evaluation by the advocacy teams estimates that banks statewide exacted greater than $1.6 billion in charges from New Yorkers since March 2020.
Lengthy Island was hit the second hardest amongst areas statewide, behind New York Metropolis, based on calculations by the New Economic system Undertaking.
An govt order from Gov. Andrew Cuomo directing state-chartered banks to droop all charges for overdrafts, ATMs and bank cards didn’t apply to the large nationwide business banks.
The New Economic system Undertaking, a Manhattan-based group, estimated the quantity of charges charged to New Yorkers based mostly on the banks’ obligatory studies filed to the Federal Deposit Insurance coverage Company‘s Abstract of Deposits annual survey. The group extrapolated the charges charged to prospects in every area based mostly on the % of deposits held in every financial institution.
On Lengthy Island, the information signifies banks charged almost $70 million in overdraft charges, nearly $14 million in ATM charges and roughly $37 million in upkeep charges.
New York Metropolis residents paid an estimated $1.27 billion in charges, together with almost $754 million in overdraft charges alone, the teams discovered. Statewide, New Yorkers paid slightly below $1 billion in overdraft charges, greater than $183 million in ATM charges and $471 million in upkeep charges, based on the evaluation.
“It’s so abhorrent and egregious that they’re extracting all this cash from struggling individuals through the disaster,” stated Andy Morrison, affiliate director of the New Economic system Undertaking.
In March 2020, with the economic system largely shutting down, Gov. Andrew M. Cuomo issued an govt order directing state-chartered banks to droop all charges for overdrafts, ATMs and bank cards.
However the directive didn’t have an effect on nationwide business banks which are members of the Federal Reserve System similar to JPMorgan Chase, Citibank and Financial institution of America.
And whereas the Federal Reserve Board waived overdraft charges for big banks through the early months of the pandemic — and really useful the monetary establishments present the identical leniency to its prospects — many banks stored their charges in place, information present.
JPMorgan Chase, which has 140 places on Lengthy Island, was chargeable for almost 40% of whole charges charged to Lengthy Islanders through the pandemic, essentially the most of any financial institution, Morrison stated.
Chase maintained it gave prospects a break. “Final 12 months, when prospects stated they have been struggling, we waived charges on over 1 million deposit accounts, together with overdraft charges — no questions requested,” responded Briana Curran, a spokeswoman for JPMorgan Chase.
Clare Cusack, president and chief govt of the New York Bankers Affiliation, stated most New York banks waived overdraft and different charges “to be able to assist reduce the monetary hardship of the COVID-19 pandemic on New Yorkers” whereas providing prospects “BankOn licensed accounts” that don’t cost for overdrafts, unfavorable balances or account utilization.
The Middle for Accountable Lending, a nonprofit group based mostly in North Carolina, has reported that the overwhelming majority of overdraft charges are paid by prospects who carry low balances — usually lower than $350. Many shoppers, typically Blacks and Latinos, find yourself having their checking accounts closed because of these charges, the group discovered.
The New York advocacy teams stated the answer is the creation of extra community-based public banks that might not cost extreme charges. They assist the NY Public Banking Act, which additionally has the assist of many Lengthy Island Democrats and would enable native governments to create their very own publicly owned banks that might maintain municipal deposits and reinvest in neighborhood wants, together with inexpensive housing and small companies.
“Lengthy Islanders want alternate options similar to native public banks to assist rein within the profiteering by business banks as a result of the present system is failing to focus them on serving shoppers,” stated Ian Wilder of Lengthy Island Housing Providers, a Bohemia-based honest housing nonprofit.