Kristen Clarke, president and executive director of the Lawyers’ Committee for Civil Rights Under Law, issued the following statement Tuesday, January 24, after Bank of America stopped offering free checking accounts benefitting low-income customers, who must now pay monthly fees to maintain their accounts. Such a move adversely impacts poor and minority consumers, who are punished simply because of their bank account balance.
“Poor people who are denied access to traditional bank services are left vulnerable to costly check-cashing outlets, pawnshops and other predatory services. Bank of America’s action will result in the expansion of unbanked and underbanked communities across our country. By pushing poor people into the dark world of alternative financial services characterized by higher fees and exorbitant interest rates, low-income communities are at risk of being thrust into further economic distress. This action also has a disproportionate impact on poor African American and Hispanic consumers who are overrepresented among those who are unbanked and underbanked across the country.
“We urge Bank of America to reverse course and undertake action that will provide low-income communities greater access to low-cost mainstream banking services.”
Estimates from a 2015 survey by the Federal Deposit Insurance Corporation (FDIC) found that seven percent of American households, roughly nine million households nationwide, were unbanked. Another 20 percent of American households, roughly 24.5 million nationwide, were underbanked, meaning they lacked access to a full range of basic financial services. An online petition protesting Bank of America’s decision to end its free checking service has already garnered over 49,000 signatures.