Ebene News – US – With their finances ravaged, customers fear banks will withhold stimulus checks

Banks have the power to decide whether to let overdraft clients access the stimulus money deposited into their accounts, but they have taken different approaches

Since August Morgan Banke has just enough money in her bank account each month to pay rent or car insurance The unemployed mother of two has leaned on her bank, the Dupaco Community Credit Union in Dubuque , Iowa, to cover the difference But every time she makes that choice, the bank charges her $ 28 overdraft fee Her account is $ 780 in the red

When she learned the federal government was working on a new stimulus package, Ms Banke called Dupaco to ask if he would waive the unpaid fees. If so, she was hoping she could tap into stimulus funds Bank officials said no

Ms Banke, who sells her goods on Facebook to make ends meet, is unsure if she will get any money. “When we were told we were getting another stimulus, I was excited,” she said. she said Now she is shot

As 2020 draws to a close, the $ 600 pledged by the federal government – which is expected to start showing up in bank accounts this week – is good news for millions of needy Americans whose finances have been devastated after nine months of economic crisis caused by the Coronavirus pandemic

But for people with overdrawn bank accounts, the question of whether they get their hands on the money depends on what the country’s banks – which, as in Ms Banke’s case, are also the creditors on overdraft accounts – decide to do Banks hold this power because for a large majority of people the stimulus money will be deposited into the same bank accounts where they also receive tax refunds

Over the past week, America’s largest banks have pledged to temporarily write off negative balances for their customers so they can access their stimulus money and direct it toward all expenses. which seem the most urgent Negative balances usually include the various fees that banks apply to customer accounts for letting customers withdraw more money than they have

Representatives from Bank of America, Citigroup, JPMorgan Chase and Wells Fargo said banks will credit customers’ accounts for about a month after the money arrives After that, the banks will revert the accounts to their previous overdraft status It was a retaliation for the relief they offered their customers when the first round of stimulus funds were distributed in April.

The large regional banks, including Fifth Third Bancorp, Truist (the institution formed by the combination of SunTrust and BB&T), PNC Financial Services and US Bank, follow suit

However, some regional and community banks – which often serve areas where there is little competition, including poor neighborhoods and rural communities – are pursuing different approaches Some small banks say they are reviewing customer requests on a case-by-case basis. case

Citizens Bank, a regional bank that primarily serves customers in the Northeast, said it would temporarily delete all of its customers’ accounts, but only if customers specifically called and requested it. A spokesperson for Citizens has said the bank would email customers reminding them that the option was available to them

The disparate approaches of small banks often require customers to determine the options available to them, when many are already stressed by the enormous financial challenges they face Consumer income fell in November; layoffs continue, especially in hard-hit industries like restaurants; and the unemployment rate remains high

Dupaco, the credit union where Ms. Banke, 25, has had an account for six years since she started working as a bartender in Dubuque, has no general customer policy. “We work with members on an individual basis to deal with any situation they may have, ”said Dave Klavitter, a spokesperson for Dupaco He refused to speak to Ms Cas de Banke

Having waived Ms. Banke’s overdraft charge three times previously, bank officials were unwilling to grant her a waiver once again when she called them recently to ask for one, Ms. Banke Although the bank has not said it will not get the $ 600 stimulus fund, Ms Banke, who lives in Madison, Wisconsin, remains worried She cannot work because her 5-month-old son has respiratory disease She plans to ask Dupaco if he can temporarily reset his balance

Temporary forgiveness from banks might not be enough, especially for those in the worst financial straits Since the coronavirus outbreak hit, one in four people in the United States have struggled to pay their bills monthly, according to a study published in late September by the Pew Research Center One in three have dived into savings or retirement accounts One in six have borrowed from family or friends to pay their bills

Bank charges add further pain to Americans’ pandemic-induced woes In 2019, according to the Center for Responsible Lending, major banks collected more than $ 11 billion in overdraft fees from their customers, 9% of customers paying more than 80% of fees For the first nine months of 2020, clients of major banks paid $ 6 billion in overdraft fees, according to Rebecca Borné, a researcher at the non-profit organization, which advocates better treatment of consumers by financial institutions.

The total amount of penalties the bank’s customers paid in 2020 might end up being lower than last year, but since so many penalties are paid by such a small subset of customers , the impact of these fees on their finances will probably be much worse this year

Aside from the temporary truces that some banks have entered into with their customers around stimulus checks, banks have not changed their overdraft policies during the pandemic, Ms. Borne said “Charging excessively high fees, multiple fees per day, extended fees and other practices that manipulate fees to maximize fees – these practices hurt those who have the most difficulties the most,” a- she declared

On Christmas Eve, Andrew Shorts, an artist living in Ogden, Utah, scrambled to pay his electric bill so he wouldn’t lose power and heat in Mr. Shorts, who paints murals and graphic design projects for local businesses, has been locked in his account at Zions Bank, a Salt Lake City-based lender, since a rapid fire of automatic deductions for household bills this fall caused his balance to drop. from $ 150 to negative territory

When he called Zions two days before Christmas, a rep told him he should probably pay the bank what he owed him and pay the rest. The bank changed its policy after President Trump signed the stimulus bill on Tuesday A spokesperson said Zions would write off all negative balances up to $ 2,000 for 30 days to allow customers to get their stimulus money

Mr. Shorts described the $ 600 stimulus payment as “the equivalent of a pool noodle while my wife, my child, myself and my now crippled business drown in the open sea” But he wants to always money In the meantime, he has collected just enough to pay his electricity bill

On the day Congress passed the latest stimulus bill last week, Misha Roberts, a 26-year-old student at Ohio State University, couldn’t bring herself to log on to his PNC online account and find the balance She knew the negative amount was between $ 1,200 and $ 1,700, thanks to a combination of basic expense bills she couldn’t afford, which were automatically deducted from her account, and overdraft fees.

Some banks have closed accounts with overdraft balances A PNC spokesperson said that in cases where accounts had been recently closed, either the IRS would send a check to the customer or PNC would allow the customer to ‘use another existing account to receive the money

Ms Roberts, who wants to become a nurse, works to pay for her college education and has already had to drop out several times after running out of money For two years she worked night shifts as a home health aide, earning 10 $ 50 per hour But when the pandemic hit, the company that sent her to care for the elderly began to lose clients

“Fewer hours for everyone means less money for everyone, and that has sometimes made my work environment very tense,” Ms Roberts said

She recently quit and now spends weekends cleaning the common areas, including the gym, communal kitchens, stairwells and lobby, in the apartment building she lives in, earning 15 $ per hour In an email Monday, she said of the $ 600 raise: “I really need it or I might be forced to quit school again”

Late Tuesday, after learning that PNC would temporarily cancel client overdrafts, Ms. Roberts finally had the courage to look at her balance.But when she tried to log in, she said she was stuck PNC had closed her account

How to Get a Stimulus Check, When Will I Get My Stimulus, How Much Does the Stimulus Check Cost

Ebene News – United States – Their finances are ravaged, customers fear that the banks are withholding stimulus checks

Source: https://www.nytimes.com/2020/12/31/business/stimulus-checks-overdraft.html