In a note to clients about the Consumer Financial Protection Bureau.
Bove argues in a new research note that the CFPB’s examination of overdraft fees published Tuesday, coupled with its pressure on payday lenders will force low-income Americans into an even seedier version of “shadow banking system”: the Mafia. And he should know, he says, because his own family once turned to the Mafia in time of financial need. “This is not theory,” Bove writes, “when I was a child my father was ill due to a botched operation on his gall bladder. He was in the hospital for over one year. The only source of funding for my family at the time was the Mafia.”
“If banks are unable to make money available under this system because the CFPB mandates that they lose money on overdrafts, then the household loses access to this method of funding,” he wrote in a note. “The question is then where will the household get the money it needs to meet short-term obligations. The answer, of course, is through illegal lending operations aka the Mafia.”