The Bank Policy Institute (BPI) has submitted a statement to the U.S. Senate Banking Committee for a hearing on fees in financial services. The statement explores the numerous ways that banks support businesses and consumers by making financial services safe and accessible.
Paige Pidano Paridon, BPI senior vice president and senior associate general counsel, urged lawmakers to hold the Consumer Financial Protection Bureau (CFPB) accountable for its campaign against bank fees. Paridon stated, "We urge lawmakers to take action and hold the CFPB accountable for its misguided campaign against bank fees, which contrary to the CFPB’s misrepresentations, these fees are not ‘junk fees.’ In the same way that governments collect taxes to pay for roads and bridges, banks pay for essential systems and staff through fair and transparent service charges."
She further argued that criticizing the banking industry for charging fees overlooks the substantial benefits consumers enjoy — at low or no cost — such as direct deposit, FDIC insurance, 24×7 access to funds, cashback and fraud and travel protections.
The BPI members operate over 36,000 branches nationally, employ nearly 2 million Americans and facilitate trillions in loans to households and businesses. Service charges are crucial in funding these activities.
The institute also emphasized that banks are constantly identifying ways to better serve their customers by expanding access to financial services. This includes lowering or eliminating charges like overdraft fees or offering low- or no-cost deposit accounts through programs like Bank On.
Unlike other industries, banks are heavily regulated and are required by law to disclose all fees when an account is opened or when service charges change. Fees also incentivize responsible financial behavior by encouraging customers to pay on time and adopt other healthy financial habits.
For more information about bank fees, you can access a copy of the written statement here. You can also learn more through resources such as Rhetoric vs. Reality: The CFPB’s Irresponsible Commentary on Credit Card Late Fees and The Role of Credit Card Late Fees in Encouraging Timely Repayment Is Essential to Efficient Functioning of the Market.
The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks and the major foreign banks doing business in the United States.