What Are the Big Banks Up to?
America's biggest banks-Bank of America, JPMorgan Chase, and Citigroup-account for more than half of all credit cards nationally. With overall credit card debt at $875 billion, the credit card industry–and the banks that control it–took in $36.8 billion in profits in 2006 alone.
As the biggest banks get even bigger, they're using their size and market dominance to drive up credit card, banking, and ATM fees on consumers around the country.
Money from fees. From 2002 to 2006, the nation's ten largest banks increased their reliance on fees by 17%.
- From 1994 –2005, over–the-limit fees in the credit card industry more than doubled, while late fees nearly quadrupled.
- Interchange fees–fees credit card issuers charge merchants when you use your card–have tripled since 1998 amounting to $30 billion a year today. The increased cost of interchange fees is often passed on to consumers and totals more than $300 per American household every year.
- Last summer, Bank of America–the bank with the largest ATM network in the country–increased noncustomer ATM fees by 50% to as much as $3 per transaction. Other leading banks are quickly following suit.
- Americans pay billions more in overdraft fees than the actual amounts they overdraw from their accounts. In 2006 alone, consumers paid $17.5 billion in overdraft fees on just $15.8 billion in overdrafts.
Under–Serving Low-income and Communities of Color. The biggest banks in the country are disproportionately failing to provide access to bank branches and products to low-income and minority communities.
- In Chicago and New York, the top three banks (by number of branches) in each city would each need to approximately double the current percentage of branches they have in majority–minority zip codes in order to equitably serve those communities.
- In Los Angeles, Wells Fargo, Chase, and Bank of America's shares of the African–American mortgage market were more than 50% lower than their shares of the white mortgage market. In other words, they were all more than twice as likely to be the mortgage lender for a white borrower as for an African–American.
- In Chicago, Bank of America was more than twice as likely to be the mortgage lender for a white borrower as for an African–American, falling 54% short of having equal shares of both lending markets.
- In New York, Wells Fargo was nearly twice as likely to be the mortgage lender for a white borrower as for an African–American (48% disparity) and Citigroup and Bank of America were approximately one–and–a–half times more likely to be the mortgage lender for a white borrower as for an African–American (30% and 29% disparities respectively).
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