US Banks to Collect $38.5 Billion In Overdraft Fees This Year

From the Financial Times:

US banks stand to collect a record $38.5bn in fees for customer overdrafts this year, with the bulk of the revenue coming from the most financially stretched consumers amid the deepest recession since the 1930s, according to research. The fees are nearly double those reported in 2000.

The finding is likely to increase public hostility towards the financial sector, which has been under political pressure to ease the burden on consumers by increasing credit availability and lending more fairly after being bailed out by taxpayers.

The Federal Reserve is working on rules on overdraft fees, and rules on customer charges could be a priority of the Obama administration’s proposed Consumer Protection Agency if approved by Congress.

The median bank overdraft fee has this year rose from $25 to $26, according to Moebs, the first time it has gone up in a recession for more than 40 years.

Read more here
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Ouch!

  • Overdraft fees are ridiculous, especially when considering our current economy. I find it amusing that people who don’t have money in their bank accounts to cover their expenses are charged a fee. They don’t have money. I realizes this is a deterrent, but the penalties are outrageous. I know that my bank, which will remain nameless, charges $35 each business day after your initial overdraft. If they want to charge people a fee, make it reasonable, like $5-10.

  • GARY

    The banks are now taking to much, hold small debits and put the large one up first to create multiple O/D fees.
    Auto deposit allows them to hold debits as long as possible to receive the large debit that will over draw the account then they “post” (all of) them as overdrawn, charge the fee after they hold the deposit for 24 hrs then release it and collect their monies. It’s amazing to me how I have so many “pending” little fees sitting there when I have money in the account to cover them and they all come out the night my deposit goes in. The deposit doesn’t cover them because they hold that until the next day