Financial Flexibility for All!

We believe that everyone should have the option to avoid high fees charged by merchants for bounced checks or declined transactions — not to mention the inconvenience and embarrassment that comes with it. This is why many financial institutions, including Great Meadow, have overdraft protection.

There are some in government — including the White House Competition Council — that is calling for the removal of this protection. They place overdraft fees into a bucket of “junk fees” they consider to be hurting Americans.

And while they will say, “There is nothing wrong with a firm charging reasonable add-on fees for additional products or services,” they are failing to see what the removal of overdraft fees will have on our most vulnerable Americans.

What are overdraft fees?

For starters, overdraft fees are not “junk fees.” An overdraft fee occurs when you spend more money than you have in your account and your financial institution will cover the transaction with a fee. These fees can range in amount, but many financial institutions, including Great Meadow, offer overdraft protection plans to help members avoid these fees when possible. 

Why overdraft fees are a good thing.

Overdraft fees ensure emergency transactions are processed. Whether you write a check, withdraw money from an ATM, or make a debit card transaction, it ensures you have the money you need when you need it.

Imagine you are grocery shopping for your family, and you only have $100 left in your account. You just spent $115 on groceries. If overdraft fees are removed, the transaction will be declined, and you won’t be able to leave with your groceries.

Let’s take it one step further…

Let’s say your rent is due and you are short in your bank account. The law says you have only five days from when the rent is due to pay it before the landlord can start the eviction process. With overdraft, you can pay your rent and pay the fee on payday. Without it, you risk getting evicted from your home or you may have to take a short-term, high-interest loan to pay the difference.

And in New York, interest rates on small loans can be as high as 25%.

Think about the other situations one can run into, from medical services to necessary home repairs, to funding reliable transportation to other unexpected expenses. In many cases, the consumer will be charged a fee for the bounced check or declined transaction, and that fee will be much higher than what’s charged by the financial institution.

Without a fee, there is no flexibility, and those living paycheck to paycheck or who have limited financial resources are now worse off — not better — when the government takes away the opportunity for their financial institution to help.

What you can do.

We’re working to build a movement of people who want sound, sustainable solutions. Our grassroots campaign is focused on two key areas:

1. Advocating for policies that support consumers and do not cause unnecessary harm. We want our lawmakers and community leaders to vet policies that make banking more accessible and affordable for everyone. This includes not lumping in good practices (overdraft protection) with bad ones (true “junk fees”).
2. Empowering communities to act. Whether you’ve used overdraft in the past or not, you can see the benefits for people. Join our movement today and help us ensure financial flexibility for all.