The Banks make huge amounts on what are in effect short term loans….
The dollars involved are huge in the aggregate: Three of the nation’s largest banks by assets—J.P. Morgan Chase, Bank of America BAC -1.02% and Wells Fargo WFC -0.44%—raked in a total of $1.14 billion from overdraft fees in the first quarter of this year, according to a recent report from SNL Financial, a financial-information firm based in Charlottesville, Va.
It was the first time banks with $1 billion or more in assets that offer consumer checking or savings accounts were required to report to the Federal Deposit Insurance Corp. the overdraft fees charged to consumers. Banks with fewer assets don’t have to report the data.
Overdraft fees can add up quickly for an individual bank customer. The median overdraft fee was $30 nationwide for both banks and credit unions last year, according to Moebs Services, an economic research firm in Lake Forest, Ill. That was up from $29 in 2012 and $26 in 2009.
When consumers make a number of debit-card purchases or automated-teller-machine withdrawals in a single day that exceed their checking-account balance, they can incur multiple overdraft fees that day. Some banks increase the overdraft fees people incur in a single day by reordering their transactions, according to a report released earlier this month by Pew Charitable Trusts, a nonprofit public-policy organization.
Consumers, however, have the ability to avoid many overdrafts by turning down banks’ invitations to opt in to a service that will allow them to overdraw when they use their debit card…..Share on Facebook