This commentary originally appeared on The Wall Street Journal on December 31, 2024.
The Wall Street Journal editorial "The CFPB vs. Checking Accounts" (Dec. 25) argues that a recently finalized Consumer Financial Protection Bureau (CFPB) policy would be "bad for banks, and especially for their low-income customers." But high fees already drive low-income Americans away from banking services. According to the Federal Deposit Insurance Corporation, 6.6 million American households are unbanked and 19 million households are underbanked.
RAND released a study in July on a proposed solution in California to this banking problem. We constructed a comprehensive data set of banking fees and found that, in California, the vast majority of banks charge overdraft fees. The median fee was $30 and 90 percent of banks charge above $15....