U.S. banks will collect a record $38.5 billion in overdraft fees this year

CNN Money source

NEW YORK (CNNMoney.com) -- U.S. banks will collect a record $38.5 billion in overdraft fees this year, with nearly all the revenue paid by just 10% of customers, according to a research report released Monday.

The windfall is nearly double the $19.9 billion collected in 2000, as overdraft fees drift higher despite the recession, said Mike Moebs, chief executive of research company Moebs Services.

First we have resort scandals then the bonus scandals and now this. This should be talked about on every channel. Tax payer money went to help these institutions out which now many more are on the brink of collapse along with the FDIC, and now they are bitting the had that feeds them.

In a time of such sorrow and heartbreak for so many families, we need compassion, not greed. This is very disturbing news to read. How many CORPORTATIONS will show us 'record' breaking profits during a time that the people are suffering.

BIG Pharmaceuticals (think current healthcare reform)
BIG Oil (remeber the record profits when gas was over $4 a gallon)
BIG Banks (think current economic crisis)
BIG Insurance (think current economic crisis)

These industries care not about the common person. They care about profit. What is sad is that these companies are some of the key groups "lobbying" for legislation. In other words they control the government.

That leaves us with:

BIG GOVERNMENT (think since 1907)

The government is being controlled for profit, not for the betterment of society. If the government really cared, they would put a stop to the raping of the american people.

People are incuring overdraft charges because they lost their jobs due to the gambling addiction that is decaying the insurance and banking institutions. Now the people are paying twice over for the corporations greedy mistakes. (think CDS market)

We are losing our country one scandal at a time.

CNN Money source

Bring 'em all down, if you ask me. How I do loathe them. They don't care about anything other than making money, in any way,shape or form necessary.

I'm reading The Creature From Jekyll Island right now, so this is not surprising news to me, but it still gets under my skin.

Good article, starred, flagged, dugged, all that nonsense.

By my calculations that's about 128 dollars per person. However since only about 10 percent of people pay the majority of these fees, thats over 1000 bucks each. From people that don't have the money to spare in the first place. These people also are generally the ones that use payday loans, have 30% interest car loans, etc. Those who have low FICO scores end up getting charged way more to borrow money, end up with low account balances (living check to check) and end up losing even more money to these overdraft fees. I went through this many years ago, and more that third of my check ended up going to overdraft, interest, and payday loans. It's a vicious cycle that is hard to break, and usually the only way out is if you get help from someone else and make do with the bare minimum for a long time.
As unemployment continues to climb, I expect to, so will the profits of these banks. The same banks that needed us (the taxpayers) to bail out. At the same time, the standard of living for many will fall.

This quote from the source story bothers me the most.

"Most people paying these fees have a credit score below 590 or so," Moebs said. "Beyond that, they're a whole gamut of people: rich and poor, men and women."

Reading this just sickens me. This goes to show that they are profiting the most off of the poor.

Ho-ly God!

You have got to be kidding me!?

star and flag

such b.s...tells you what a scam the banking system is...

reply to post by oneinthesame


Those payday loans should be illegal. All they do is prey upon desperate people. It is bad enough that the poor take the brunt of the blow from the greed of the financial institutions, but then to offer them an easy credit that contains very exhorborant fees. That is just twitsted.

This is why I dont use a bank. I despise them. I worked as a bank teller and I hated everything they did to people. It was always the customers word against the bank and even when the customer was right they lost! It made me sick to see people's hard earned money be taken over a bank mistake and unless you know how to read some of the accounts like I did the average person wouldnt know. It made me mad and still does. My bf had his wallet stolen and he called Bank of America to report it well they said it would be taken care of and he would get a new card in a couple weeks, he just had to go to a branch on Monday and fill out a form and show ID. Well let me tell you he got 400 dollars in overdraft charges! The people who stole his wallet used his card to rent a hotel and then went shopping with it and had dinner. They cleaned his account out! Well the problem is he CALLED and reported it right away and yet it wasnt canceled until days later so in the mean time all his money is depleted and he gets a bill for 400 bucks. He called and complained of course since he called the day it happened and they waited TWO days to cancel it. He is still fighting with them over his money and the fees. It is not fair!! He did what you are supposed to do and they didnt. He no longer has an account with them but he know has this charge on his credit and it's not even his fault.


I despise banks!! I do have something like a credit card but its pre-paid and through Wal-Mart. I load whatever I want on it and I can use it anywhere. No massive fees, no worries about overdraft, if its not there it wont go through. It's great and I have had it for years and I havent had one problem. I use it to pay all my bills online and I dont get charged out the rear in fees, just 3 bucks a month and many times its free based on how much you load at times. I convinced my bf to get one of these and its great. Its a VISA and I can use it anywhere you can a bank card

Banks IMO are criminals, they only care about themselves and THEIR money not yours. Think about it, when they make a mistake it takes forever to get it fixed but damn if you do, its instant and you are basically screwed! My Aunt has worked in Banking for over 15 years and she cant stand what goes on but its her job and well right now she is stuck there. When I worked for FU I saw many thing that were just wrong and there was really nothing I could do. I even go in trouble once for helping a customer out and fixing their account! It was insane! The women felt bad but I didnt, it was our fault and I wanted to fix it for her and I did. The customers were my priority not the bank and their scheming ways which I refused to follow.

Originally posted by LeaderOfProgress
This quote from the source story bothers me the most.

"Most people paying these fees have a credit score below 590 or so," Moebs said. "Beyond that, they're a whole gamut of people: rich and poor, men and women."

Reading this just sickens me. This goes to show that they are profiting the most off of the poor.

Grrr! That is so wrong. IMO this is why it is so hard to get your head above water when you are considered poor. I know lots of people in this category and they are good hard working people who are just trying to provide and yet they are charged out the arse for things and cant save a dime to save their lives!

The Banks will bill these amounts. They will never collect most of them. This is only revenue that will lead to write offs.

They care about profit

That is called capitalism.

We have no one to blame but ourselves. Is it the banks fault? No. We have been supporters of Capitalisim, we argue it's superior, and now that corporations have run rampant we want to complain.

We are all slaves. Slaves to our mortatages, slaves to our jobs, slaves to our credit cards, slaves to the media - and tha vast majority submit willingly.

I strongly urge the people whom I care about to free themselves.

I do not have a career. I have a job. My job supports my basic financial needs. I do not work 60 hours a week, I do not work weekends, I do not skip lunch.

I do not have mortatage. I have a flat, my rent is cheap. I have heat, running water, and electricity. If I want to move, I move. If I get evicted tomorrow I'll find another apartment. If my neighbours are jerks I'll move. My place isn't an investment in my future, it's a place to live.

I do not have a credit card. If I want something which is not a need, I save my money and then I buy it in cash.

I don't have a lot of stuff I don't need and I'm happy, fulffilled and healthy.

Our obsession with stuff is ruining our quality of life by pushing us into debt, poverty and illness.
Capitalism feeds off our greed.
I have chosen a different way for myself. Banks don't like me because they can't profit off of me. If you want to get back at the banks for what you allowed them to do to you, then free yourself of the lie that wealth = happiness.

What do you expect people nothing better than making profits out of an economic crisis and the desperation and sorrow of the people in the nation.

But is ok, do not disappear the government see no evil and hear no evil.

So is most be OK.

Don't we already have laws against predatory business practices during times of crisis? Isn't this called Profiteering and Price Gouging?

Oh wait? Only Florida has laws against that...but as a Nation we should strongly consider such as well.

Since these Banks that are making windfall profits using unethical business practices (i.e., processing charges against an account before processing deposits to an account, regardless of their chronological dates, and withholding the deposit of funds to an account to the maximum allowable by federal law to ensure their customers incur overdraft charges) and they were bailed out with Federal funds to the tune of a couple Trillion. Then, what's fair is fair and since they took our money without even a "Thank You!" then they should have to bow to Federal Banking Reform Laws that force them to stop their predatory practices of Profiteering and Price Gouging!

When the Federal Government gives a Bailout, it isn't a free Handout. It is a Helping Hand that comes with strings attached. When you accept those funds, you are inviting the Government in as a partner/stockholder in your business. The Government shouldn't be so sheepish to step up to the plate and start swinging the bat...especially in concerns with abolishing predatory, unethical business practices that are inherently anti-competitive in a Free Market (although in this case, granted it's more a matter of the entire Market price-fixing).

If Congress can look the Telcos straight in the eye and call B.S. on the predatory pricing of Text Messaging and demand either the Telcos change immediately or face legislation forcing them to change according to the terms of Congress, then Congress sure as heck should be going toe-to-toe with the Banks and demanding similar reforms lest they feel the wrath of the hand that fed them.

reply to post by fraterormus


Oh, is new reform already but is going into effect in 2010 so hey plenty of time for the financial industry to re-coup the loses they will have if the reform is to be enforced.

Very convenient.

Sorry wrong year.

[edit on 12-8-2009 by marg6043]

Government taxes the rich

and the rich taxes the consumer.

In the end , the rich are still rich

and the poor are poorer.

What a life!

Originally posted by sligtlyskeptical
The Banks will bill these amounts. They will never collect most of them. This is only revenue that will lead to write offs.

Not really my friend. I would say they MAY not be able to collect 'some' of them. Not most. Anyways, that still doesn't make it right in any way shape or form. It's criminal. That these people can charge you for something that will take a computer to put through in fractions of a second. Not only that, if a customer has multiple charges coming out they get robbed. How?

Well, let's say for example that you purchased something on Sunday at McDs (yes, you deserve what you get if you buy that crap but let that go for now), it costs about $6. Then you go to the gas station afterwards and put in $25. Then you pick up some bread and milk at the store for $12. Then on Monday you pay a bill like the power for $150.

Okay, on Tuesday everything comes due. You forgot that you had an automatic withdrawal that came out for $25 which won't cover everything you just spent over the weekend with your bill. Everything is set to come out on Tuesday. (Because those little charges amazingly enough will hold off for days on end when your balance is low). What comes out first? The McD's that you bought first? Nope. The gas? Nope. The milk and bread? Nope. The highest dollar item comes out first because the "Bank" wants to take care of you. This is the exact words my brother was told. That they do that to take care of the customer.

Let's say you had $140 in the account after that $25 automatic withdrawal came out. You see the criminality of this? They could have easily covered everything and put ONE item into overdraft for the single fee of whatever they charge (my brother's fees are $35 with Huntington Bank). But NOOOOOOOOO, they push the payment through that will overdraft the account AND THEN all of the smaller fees. So that $6 McD's turns into a $41 meal and the gas turns into a $60 investment and the bread and milk costs you $47 on top of your utility bill now being $185. This is a TRUE scenario that took place. So, instead of there being only a single $35 fee (with him getting paid on Thursday to cover the $150 that would have gone into overdraft), he ends up with $140 in fees. It's a criminal act that these banks justify.

You see, they used to not allow you to make purchases with your debit card if you didn't have the funds to cover the purchase. Over the past couple years they have changed this and now call it a 'customer service feature' where they will loan you the amount over for a one time charge of $35. You know what? F THAT BS!

The saying about bankers, politicians and lawyers is true. They are the true criminals on this planet.

When I say that I am NOT talking about the people that work FOR the bankers, politicians and lawyers. I'm talking about those that have sold themselves to the devil in the name of greed.

Yep. I probably donated $1000 of that in the last year alone. I must say however that US Bank aren't such dicks like Wells Fargo and BofA are.

What I love is when you deposit a $2000 Payroll Check drawn from funds at the same Bank Branch on the 1st of the Month. Knowing that by law they don't have to Post/Deposit those funds into your account for 14 business days, you wait until the 20th to use those funds which are shown on your account as "Available". You then use your Debit Card to make three purchases for $50 totaling $150 against your $2000 "Available" deposit made 20 days (14 Business Days) earlier. However, their Accounting processes the Debit Card Transactions you made 20 days later before actually POSTING the Deposit on the 1st, so you have a balance that goes:

-50 Debit Card Charge on 7/20
-35 Overdraft Fee
-35 Insufficient Funds Fee
-50 Debit Card Charge on 7/20
-35 Overdraft Fee
-35 Insufficient Funds Fee
-50 Debit Card Charge on 7/20
-35 Overdraft Fee
-35 Insufficient Funds Fee
+2000 Deposit on 7/1
= $1640 Balance.

The Bank just made $210 in Fees off of you from 3 Transactions!

On top of it, they just made a negative report to all three Credit Reporting Bureaus, and the Monthly APR Interest Rate on all of your Lines of Credit at every other Bank and Business just went up to the Maximum Amount allowed by Law! Congratulations, you are now the proud owner of Credit Cards with > 33% Interest!

Be Forewarned: When you make a Deposit, your "AVAILABLE" Balance is not your real Balance. It is not truly Deposited until it is "POSTED".

[edit on 12-8-2009 by fraterormus]

They have been collecting accessive overdraft fees all along. Just think about it, overdraft fees add up daily and some people end up paying thousands of dollars. You can't close the account yourself so the fees keep piling up until they decide to close it or you pay the bill. That's highway robbery. I can imagine there will be a lot of cheating on the banks part in order to generate cash. They are already jacking up interest rates on credit cards.

I also love how banks do the "highest amount first" technique.

Let's say you have $100 in you account. You make a few purchases in the morning, $2, $6, $5. In the afternoon you go online and make a purchase for $99, making you go over by $12. The next business day you see that the bank charges you for 3 overdraft fees totaling $112. You say to yourself, WTF???

You just got screwed by the "hey, I just work here" highest amount first technique.

The highest charge goes out first on your daily ledger. So the $99 charge is subtracted first leaving you $1, the other charges made in the morning(2, 5 and 6) are subtracted after the bigger charge.

Absolutely diabolically brilliant.

reply to post by dariousg


You beat me to the punch on your post. I have had very similar problems before. The funny thing about it is that they told me they were doing what was best in my interest by passing the largest amounts through first. Their excuse was that the larger payment might be a bill that needs to be paid. I told them if it was them helping and I don't think they are helping then they should stop helping me by passing the larger checks through first. To say the least they still will not stop helping me.