• News
  • Celebrities
  • Finance
  • Crypto
  • Travel
  • Entertainment
  • Health
  • Others

Overdraft Fees on the Rise « The Washington Independent

By 35 percent in just two years, according to a report released today by the Center for Responsible Lending, a consumer advocacy group. Those overdraft fees — applied when consumers exceed account balances when making debit card purchases — generated $23.7 billion in 2008, up from $17.5 billion in 2006, CRL found. For context, Americans spent $17.2 billion on cereal last year, the group points out. The number is significant because overdraft fees — which average upwards of $30 apiece, regardless of the amount of the purchase that triggered it — are most likely to hit young adults and low-income folks, who can least afford to pay them.

“These billions of dollars drained from consumers each year represent lost opportunities for families to save for a rainy day or buy necessary goods and services that could help spark the economy,” CRL senior researcher Leslie Parrish said in a statement.

Moebs Services, an Illinois-based financial research firm, estimates the 2009 overdraft revenue will top $38 billion.

The results shouldn’t come as much of a surprise, for several reasons. First, banks, recognizing the profit-churning potential of overdraft fees in recent years, have grown more sophisticated in their methods of triggering them. Some, for example, will reorder debit purchases by amount, rather than chronology, in order to maximize the number of overdraft fees slapped on consumers. Also, the increase in joblessness that’s accompanied the recession means that more bank accounts are hovering near empty. (Of course, it was the banks that were primarily responsible for the economic collapse that caused the recession, so for them now to be hitting affected consumers with additional fees to pad their profit margins only adds insult to injury.)

The trend has caught the eye of some powerful lawmakers, who are hoping this year to pass legislation to protect consumers from runaway overdraft fees. A House bill, sponsored by Rep. Carolyn Maloney (D-N.Y.), would prohibit banks from charging the fees unless consumers sign up for the overdraft protection service. It would also prevent banks from reordering purchases in order to maximize the number of overdraft fees.

Senate Banking Committee Chairman Chris Dodd (D-Conn.) says he plans to introduce a similar bill shortly.

Discussion & Comments (0)

    Recent Articles

    • Things You Should Know about North America

      Things You Should Know about North America

      Get to know more about North America.

    • Eurovision 2010 Paula Seling Unpredictable Contest

      Eurovision 2010 Paula Seling Unpredictable Contest

      Paula Seling's experience on the Eurovision stage led her to declare that "Eurovision is an unpredictable contest". Which may explain the success of the young Lena from Germany, about whom the predictions before the event did not offer much chances for victory.

    • VIPRow.me - The Best Sports Streaming Website Today

      VIPRow.me - The Best Sports Streaming Website Today

      Have you ever contemplated creating a user-friendly site dedicated to sports-related free live streaming channels?

    • Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      XNXUBD 2022 Nvidia users are able to watch thousands of videos and other contents online. XNXUBD 2022 Nvidia New is a piece of software that enables people to watch videos online without having to pay for memberships. On a graphics card, the XNXubd also provides some of the best gaming and virtual reality experiences.

    • Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      A new edition of the Video Editor Apk for xVideostudio.Video Studio has all the latest features, including support for multiple video download formats in HD, FHD, and even 4K resolutions.

    • 9 Best Lotion For Masturbation - Popular Choice For 2022

      9 Best Lotion For Masturbation - Popular Choice For 2022

      Masturbation is a common activity for men and women. It's a natural and risk-free way to explore your body, experience pleasure, and release sexual tension.

    • Reasons Why You Need To Stop Watching Movies From Sflix

      Reasons Why You Need To Stop Watching Movies From Sflix

      Without having to sign up or pay anything, you can watch movies online for free with SFlix. It has more than 10,000 movies and television shows.

    • Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Collins (born May 11, 1997) is a rapper from the United States. Leray started publishing songs to SoundCloud in 2014, and in 2018 she released her breakthrough track "Huddy" as well as her first mixtape, Everythingcoz.

    • Listen And Download Music On MyFreeMP3 For Free

      Listen And Download Music On MyFreeMP3 For Free

      Are you in a bind and looking for a place to obtain free mp3 songs? Never again will you need to bother, since this article has everything necessary to obtain your solution. Download free music from MyfreeMP3.com, one of the world's most popular websites.