Senator Reverend Warnock: “Junk Fees are Keeping Hardworking Americans Out of Our Financial System”

Washington, D.C. — Today, U.S. Senator Reverend Raphael Warnock (D-GA), Chair of the United States Senate Banking Subcommittee on Financial Institutions and Consumer Protection, delivered the following opening statement at this morning’s hearing on junk fees: “Taking Account of Fees and Tactics Impacting Americans’ Wallets.” Witnesses for the hearing included Ms. Lindsey Siegel, Director of Housing Advocacy, Atlanta Legal Aid Society; Ms. Michelle A. Henry, Attorney General, Commonwealth of Pennsylvania; and Mr. Brian Johnson, Manager Director, Patomak Global Partners.

Senator Reverend Warnock’s remarks, as prepared for delivery follow:

Welcome to the first hearing of the Subcommittee on Financial Institutions and Consumer Protection this Congress. This hearing is in a hybrid format, but our members and witnesses will be here in person today. We are grateful for their presence and willingness to participate.

I am honored to chair this subcommittee again this session and continue to work with Ranking Member Tillis to make life more affordable by lowering everyday costs for Georgians and Americans. And ensure stability in our financial institutions that serve families, small businesses, and communities in Georgia and around our country.

And I am proud of our efforts to ensure that communities have equal access to financial resources. So we can build an economy that works for all Americans.

Today’s hearing is about protecting Americans from junk fees in financial services and will examine the exploitative fee practices that fall under the jurisdiction of this committee. This includes unnecessary and onerous fees on bank deposit accounts, a topic I’ve examined before, as well as student loans, in the rental housing market, and small dollar lending.

We understand that many fees help fund critical services and products. But not all fees are the same. Some fees are excessively high. Some fees are unclear. And some fees exist solely so that large corporations can pad their bottom lines on the backs of hardworking families.

These fees provide no economic value. In business school, economists call this quote “rent seeking” but today I will say what we all know they actually are: junk fees.

These junk fees are keeping hardworking Americans out of our financial system, particularly those living on the edge of our economy. For example, one-third of unbanked households cite high fees as the reason that they remain without a bank account. And we know these types of fees affect poor people and people of color at a disproportionate rate.

Since this subcommittee began our examination on fees, some banks have now voluntarily made these changes permanent. I applaud Zillow, Apartments dot com, and Affordable Housing dot com for committing to transparency in their rental listings. More of their peers should follow their lead and do the same.

This is not theoretical stuff for me. I have heard from Georgians about the harms of fees. In the Consumer Financial Protection Bureau’s requests for feedback on fees, one Georgian serving in the military wrote about how technical glitches and shady business practices by their large bank cost them money and stress while they were preparing to deploy to a war zone.

Protecting our servicemembers is something that both the Ranking Member and I are very serious about. I’m glad that today on the Senate floor, we will be voting on my amendment to the NDAA to help prevent harassment for members of the military by shady debt collectors.

I am grateful for the Ranking Member’s cosponsorship of this bipartisan amendment and support in bringing that into law. Our men and women in uniform should be focusing on their missions and caring for their families, not about being nickel and dimed by unscrupulous corporations.

This is also personal for me. In addition to serving as a Senator for Georgia, I am also the Senior Pastor of the historic Ebenezer Baptist Church in Atlanta.

My church counts among its members Georgians from every walk of life. And we look out for each other. As a pastor and as a Senator, I see my work as grounded in serving others and my community—and I want to extend this call to all of our nation’s financial institutions to do the same.

These fees don’t just directly hurt families. Small businesses, which form the backbone of our economy, also face the brunt of predatory fees. The burden of excessive fees eats into their profit margins, reducing their ability to invest in expansion, hire more workers, and compete with larger corporations. By hampering small businesses’ growth, these fees impede job creation and limit economic opportunity.

I believe Congress, and this Subcommittee, in particular, have an important role to play in ensuring that the financial institutions that support our communities, small businesses, and working families have the resources, tools, and support to continue their important work.

At the same time, this is about our values, too: we must hold these businesses accountable when they juice their profits off the backs of hardworking Americans, and ensure that they are not looking at these customers as easy marks to be taken advantage of with onerous or opaque fees.

As a longtime student of Dr. King, this makes me think of words he wrote in his very last book, “Where Do We Go From Here? Chaos or Community?.” Dr. King said “The profit motive […] when it is the sole basis of an economic system, encourages a cutthroat competition and selfish ambition that inspire men to be more I-centered than thou-centered.” 

I am focused on growing the middle class by lowering costs for Georgians and saving them money. Like all of my hearings, this hearing is about helping people, helping communities, and helping small businesses by making life more affordable. As American families, small businesses, and communities recover, we must ensure they have the resources they need not only to survive, but also to thrive.