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Dollar General, Dollar Tree, and Kroger rake in a combined $90 million a year from cash-back fees, according to a new report by the Consumer Financial Protection Bureau.
The Consumer Financial Protection Bureau published a report Tuesday highlighting how large retailers such as Dollar General and Kroger exploit low-income communities' lack of access to local banking to hit consumers with predatory cash-back fees.
The CFPB found that while many retailers still offer free cash back at the register, Dollar General, Dollar Tree, and Kroger collectively rake in $90 million a year from fees imposed on people using the retail locations to access their own money.
"At Dollar General and Dollar Tree/Family Dollar, cash-back fees for small withdrawal amounts are the highest in the sample ($1 fee or more for cash-back amounts under $50)," the bureau found. "Kroger, the country's largest grocery chain, recently announced new charges at their Harris Teeter stores (75 cents for $100 cash back or less), and charges 50 cents for up to $100 cash back at their other brand stores such as Ralph's, Fred Meyer, and others."
The CFPB emphasized that such fees are disproportionately levied against people with lower incomes, who are more likely to live in areas with fewer banking options—forcing residents to rely on dollar stores for easy access to cash. The report notes that banking industry consolidation and branch closures have left a "void" of cash access spots that retailers like Dollar General have rushed to fill.
"While retail chains had long provided cash back on debit card purchases for free, the CFPB has found that dollar store chains and other retailers are now charging fees for access to cash," Rohit Chopra, the CFPB's director, said in a statement Tuesday. "Many people living in small towns no longer have access to a local bank where they can withdraw money from their account for free. This has created the competitive conditions for retailers to charge fees for cash back."
"Dollar General alone chalked up gross profits of $11.82 billion in 2023. But they nonetheless find new ways to squeeze even more money from their shoppers."
Stacy Mitchell, co-executive director of the Institute for Local Self-Reliance (ILSR), applauded the CFPB's new research as an "important report" that "exposes yet another way in which dollar stores' exploitative business practices take advantage of consumers."
"The three big dollar store chains make enormous profits," said Mitchell. "Dollar General alone chalked up gross profits of $11.82 billion in 2023. But they nonetheless find new ways to squeeze even more money from their shoppers—in this case, by charging them a few dollars to get cash back on their transactions, which average only a modest $25 or so. All three major dollar store chains have been fined for overcharge errors, and all use their market muscle to force suppliers to create 'cheater' sizes for them. CFPB's report will help alert shoppers to these abusive retailing practices."
ILSR has long worked to shine light on the abuses of dollar stores, releasing a report last year detailing how the retailers have invaded low-income communities and preyed on vulnerable consumers as well as workers.
"One might assume that the dollar chains are simply filling a need, providing basic retail options in cash-strapped communities. But the evidence shows something else," reads ILSR's report. "These stores aren't merely a byproduct of economic distress, they are a cause of it."
"In small towns and urban neighborhoods alike," the report adds, "dollar stores drive grocery stores and other retailers out of business, leave more people without access to fresh food, extract wealth from local economies, sow crime and violence, and further erode the prospects of the communities they target."
One observer said the analysis shows that "big corporations will use any tactic they can to make an extra buck."
A report published Friday by the U.S. Consumer Financial Protection Bureau found that large banks charge customers higher credit card interest rates than smaller banks and credit unions, potentially costing consumers hundreds of dollars per year.
As required by federal law, the CFPB analyzed 643 credit cards from 156 issuers—84 banks and 72 credit unions—offered from January through June 2023 for the agency's updated Terms of Credit Card Plans survey.
"Our analysis found that the largest credit card companies are charging substantially higher interest rates than smaller banks and credit unions," CFPB Director Rohit Chopra said in a statement. "With over $1 trillion in credit card debt outstanding, the CFPB will be accelerating its efforts to ensure that consumers can access better rates that can save families billions of dollars per year."
Among the report's key findings:
"This new insight into the predatory practices deployed by big banks confirms what many customers already know: Big corporations will use any tactic they can to make an extra buck," said Lindsay Owens, executive director of the progressive think tank and advocacy group Groundwork Collective.
"Thankfully," Owens added, "CFPB has already stepped up to take on the credit card industry by clamping down on misleading rewards programs and working to ban the junk fees that only serve to disproportionately harm low-income people."
"The expansion of U.S. LNG export capacity simply empowers Big Oil giants and commodity traders' ability to earn eye-popping profits," noted one expert.
Belying Big Oil's claims that vastly expanded U.S. liquefied natural gas exports benefit consumers, a report published Wednesday revealed that fossil fuel speculators and commodity traders would be the main beneficiaries from eight proposed LNG projects, while American consumers and the climate would suffer higher prices and emissions.
The report—entitled Methane Madness—was published by Friends of the Earth, Bailout Watch, and Public Citizen and examines how the controversial Calcasieu Pass 2 (CP2) LNG export terminal in Louisiana and seven other proposed projects would harm U.S. consumers while fueling the climate emergency.
"Big Oil's talking points about European energy security are cynical and inaccurate," said Lukas Ross, climate and energy deputy director at Friends of the Earth.
The report found that:
"Record LNG exports drive up home heating prices for Americans, and line the pockets of fossil fuel CEOs, and these new planet-wrecking projects are not in the interest of the public," asserted Public Citizen energy researcher Alan Zibel.
"No amount of misleading energy industry lobbying can undo the simple reality that LNG exports force American consumers to pay more in the long run while U.S.-produced gas winds up in Beijing and Berlin," he added. "The expansion of U.S. LNG export capacity simply empowers Big Oil giants and commodity traders' ability to earn eye-popping profits."
The new report came as the Biden administration reportedly paused CP2's approval pending a Department of Energy review of the project's economic, national security, and climate impacts. While welcoming the news, climate campaigners argued that a pause is not enough.
"Now that they have paused, there is only one thing to do: Vow to reject CP2 and all 17 proposed LNG projects, and to phase out ALL fossil fuels," said 350.org U.S. campaign manager Candice Fortin. "Our frontline partners on the U.S. Gulf Coast have been fighting against oil and gas projects and for their homes and lives for decades. It is past time for the government to listen and stand up to the billionaires who are knowingly promoting toxic energy sources."