Portland - Oregon’s Senator
Jeff Merkley and Connecticut U.S. Senator Chris Dodd held a
roundtable discussion today with OSPIRG consumer advocate Matt
Wallace, University of Oregon student Dave Zahn, and Oregonians
affected by the financial crisis, to discuss ways to protect
consumers.
One of those affected
Oregonians was U of O Junior Dave Zahn, who talked with the Senators
about his personal experience with one of the “Too Big to Fail”
Banks.
David chose his bank because
of their advertised 'Free Checking' accounts. Unbeknownst to him,
the bank had signed him up for one of their interest bearing, premium
accounts, charging him $6 a month to earn interest on big balances
that, as a college student working nights, he simply didn't have.
“That's not a lot, but I
don't have a lot of money,” said David. “And that adds up.”
David also signed up for his
bank's 'Keep the Change' Program, which meant that all of his debit
card transactions would be rounded up to the nearest dollar, and the
remainder automatically deposited into a savings account.
Unfortunately, his bank did not consider the money in savings when
Dave overdrew his account for some small purchases. Instead, when
Dave overdrew, they charged him $35 per transaction, instead of
taking the money that had been automatically deposited to his savings
account. Oregon households paid more than $180 on average in
overdraft fees last year, even higher among young people.
“I don't want to get a $3
loan to buy a cup of coffee if it's going to cost me $35. I'd rather
just pay for it some other way,” said David. Oregonians paid an
estimated $44 million in overdraft fees in 2008.
While some large banks in Oregon
have announced changes that in the future will present consumers with
the choice about whether or not to enroll in these programs, even if
those changes were announced today many Oregonians would be left in
the cold.
Dodd has proposed, and Merkley
supports, streamlining consumer-focused oversight of financial
institutions into a new Consumer
Financial Protection Agency that will end abusive financial
practices. The CFPA will end predatory mortgage lending practices,
credit card abuses and other faults in the financial system that have
helped lead to the financial crisis.
Dodd chairs the Senate
Committee on Banking, Housing and Urban Affairs, of which Merkley is
a member.
