“This is a critical distinction that must be made; individuals who utilize payday lenders and other high-cost loan products do so because they have inadequate cash flow, not because they lack access to banking services,” a coalition of business and banking groups wrote to legislators.James Hamilton, an economics professor at University of California San Diego, said where a public bank gets its money to lend and how transparent it is will be important.
One reason: low-income consumers are often burdened by bank fees that others with higher balances don’t have to pay. Black households are almost 2 times more likely to pay overdraft fees than white households, and Latino households are 1.4 times more likely, says a study by theIn 2021, 11% of U.S.
Due to public pressure, some banks in 2021 reduced fees. But by third quarter the fees were back up and banks collected $11 billion that year, the Roosevelt Institute said. Online banking through a financial tech company, like Williams did, is an option. But those companies aren’t registered banks. They often partner with banks to offer their services. And some have attractedIf the state operates a public bank, people could get their paychecks, public assistance benefits and tax returns directly deposited, proponents say.
Meanwhile state and federal governments should more actively regulate banking and protect consumers, wrote Emily DiVito, author of The Roosevelt Institute’s report.
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