Thursday, February 6th, 2025

For Carlos Wimberly, the whole mess started at a convenience store when he stopped for a bottle of water and snacks. He thought he had $35 in his banking account, but he had miscalculated and had “insufficient funds” to make his purchase.

Carlos says he understood why his bank charged him a $32 fee for his mistake. But then came another $32, and another, and yet another, and a fourth $32 fee.

With each charge, his chance to get the account up to a zero-balance diminished. It became impossible when the bank began slapping $100 late fees on each item not yet recovered.

Carlos was nearly $1000 in the red. He would not be able to make it out.

“These huge overdraft fees have no relation to the bank’s costs and are hurting people that are already struggling to make ends meet,” said Jay Speer, Virginia Poverty Law Center’s (VPLC) Executive Director. “Nationwide, the banking industry is raking in about $12 billion in revenue for overdraft fees.”

The Consumer Financial Protection Bureau (CFPB) took action to close an outdated overdraft loophole that exempted overdraft loans from lending laws. The agency’s final rule on overdraft fees applies to the banks and credit unions with more than $10 billion in assets that dominate the U.S. market. The final rule is expected to add up to $5 billion in annual overdraft fee savings to consumers, or $225 per household that pays overdraft fees.

VPLC is one of 200 groups opposing a recent Congressional resolution to overturn the CFPB rule.   Overturning this rule would take away this $5 billion in savings for bank account holders.

Back in Staunton, Carlos’s downward spiral continued when he said a dispute with his landlord ruined what was left of his credit.  Not understanding how to navigate through the complicated court process, he gave up and accepted an eviction. That decision, and the judgment now on his record, would continue to haunt him for years to come.

“That was all it took to lose everything,” he says.

Like the rest of the 40% of Virginians struggling paycheck to paycheck, or officially in poverty, Carlos has financial problems in every area of his life.

Now on disability for a recent injury, the 46-year-old doubts he’ll ever be able to afford a car. He says he’s barely keeping his utilities on and relies on a food bank to make it through each month.

“That’s nothing new,” he says. “Even when I was working full-time in building maintenance, I was barely above the poverty line. I guess I’m fortunate not to have a child or a wife. It’s only me that has to bear the brunt.”