4 years ago: Same to you buddy

September 7, 2009, here on slacktivist: Same to you buddy

Last year, U.S. banks collected about $36 billion in overdraft protection fees. This year, they expect to transfer about $38.5 billion out of customers’ accounts in the form of such fees.

$38.5 billion. $105 million every day. $4.4 million every hour. $73,250 every minute. More than $1,200 a second. Transferred directly from the poor to the rich.

$38.5 billion.

I keep repeating that figure because I can’t quite manage to grasp it. The public, obviously, can’t grasp it either. Open your window and inhale — smell any torches or smoke from the barricades? Turn on CNBC, Are bankers using fake names and requiring their faces to be distorted? No? Then the public still doesn’t yet appreciate the meaning of this figure.

$38.5 billion taken directly out of people’s bank accounts.

$38,500,000,000.

I’m not suggesting that everyone who works at a bank that extracts these billions from customers through an overdraft protection scheme is, necessarily, a Bad Person due to working there. And I’m perfectly willing to allow them the chance to defend themselves. I am, in fact, eager to hear their explanation — to hear them describe the actions they’ve taken to protest this policy and the reasons why such actions have, thus far, not succeeded. My point here is only that such a defense, such an explanation, is required of them if they want to continue interacting on polite terms with the rest of us — if they want to drink in our bars or attend our churches or walk down our streets without parents clutching small children by the hand and dragging them aside and saying, “Come over here, honey, we don’t want to go near the banker.”

That, at a minimum, is what $38.5 billion a year means.

  • Fast_Moon

    “all of those stupid working class people stuck at the margins for whom
    one flat tire or one sick child or one unanticipated $10 expense can
    incur a cascading series of late fees and overdraft charges and other
    forms of emergency short-term credit”

    I’ve never had to deal with this myself, but I had experience with a ridiculous example of it through a coworker who ended up losing $150 for not having $2.

    He wrote a check for $10 at Wal-Mart, however unbeknownst to him, his wife had just made a withdrawal from the account and only left $8 in it. The check bounced, and the bank charged him a $25 overdraft fee, and Wal-Mart charged him a $20 returned check fee. Wal-Mart tried to automatically debit the $20 fee from his account, but since he didn’t have $10, he obviously didn’t have $20, either, so THAT payment bounced, incurring ANOTHER $25 overdraft fee from the bank. He called the bank, who said to take it up with Wal-Mart, and he called Wal-Mart, who said to take it up with the bank. In the meantime, Wal-Mart tried to deduct the $20 check fee from his account again, which still bounced, giving him yet another $25 overdraft fee.

    Then I had another friend who had to cancel her vacation plans with me because her bank had increased its minimum account balance from $1000 to $1500, and she had to go through the sofa and break some piggy banks to come up with the money to meet that balance or risk a recurring charge that she couldn’t afford. Yes, that $1500 is still technically her money, but given that she’s not allowed to do anything with that money except let the bank hold it or risk paying a fine, for all intents and purposes her bank account costs her $1500 to keep it open.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    For comparison, my province has an annual budget about that big. So people are being ripped off enough to fund one part of Canada’s government. That’s how big it is.

  • Hawker40

    My bank fee horror story involves my time in the navy…
    While on deployment, I made arrangements with my wife so that I would cash two checks a month on shipboard for my personnal expenses, while my entire paycheck would be directly deposited into our joint bank account for her use. The two checks a month on paydays were for a pre-agreed amount.
    Navy operations being what they were, one month both checks were mailed off the ship at the same time.
    Now, we had overdraft protection. And there was enough money in the account to cover one check. And enough overdraft protection to cover the other.
    So of course the bank bounced both. Why? Well, you can only use overdraft protection once per month. And rather than cash one check, then the other, they cashed both simultaneously, meaning both were short, and they couldn’t decide which one to use the overdraft protection for, they used it for niether.
    After explaining this to the Disbursing Officer, my Chief, and my Department Head, and making arrangements with my wife and the Navy’s pay system, I shifted my direct deposit from my wife’s bank and our joint account to my credit union, converting it into a joint account. I payed off the ‘fees’ to the bank and the navy…
    Then the bank sent my wife a nasty letter asking why the direct deposit money had stopped. We did not reply until I returned from deployment. We (me, wife, two children) then went to the bank, all the letters in hand, and closed out the account. First, the clerk sent us to the assistant manager, who sent us to the manager, who attempted to refuse to let us close our account. Taking advice from my grandfather, I proceeded to get loud. No, I was not shouting, but I was a military non-com, and could make my voice carry. “Why are you refusing to let me have my money?” and my voice echoed. The manager closed out our account (not much was in it, under a hundred dollars by this point) and tried to hand me a cashiers check, which I refused. “I do not trust your institution enough to accept a check from it.” He said he would cash it immediately, no cost, but I still refused it, holding out for cash. Cash in hand, we left.
    A week later, we got another nasty letter from the bank, saying that we owed them money because we didn’t have the minimum amount in our accout. Using the conveniently provided prestamped envelope, I sent them a copy of our closing out statement, and politely told them to fuck off to hell. Two weeks later, we recieved another such letter, which I turned over to the navy’s Judge Advocate General along with copies of the other paperwork. A couple years later, the navy JAG office sent me a letter and a check, the check being for the amount of the fees that the bank had charged me. Shortly after that, the bank sent me a letter asking why I had been so mean to them. I sent a reply, stating that if I heard from them again I would contact navy JAG and charge them with harrassement. While I doubt the navy would charge them, I do not doubt that a navy wide notice warning sailors about thier business practices would put a dent in thier business.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    The idea of the United States military throwing its weight around at the banking system would be kind of awesome. :P

    But still, geez, what a Charlie Foxtrot. Banks suck.

  • P J Evans

    There’s a bank branch inside the supermarket I go to. They won’t do anything for you, any more, if you aren’t a customer. IMO, if that’s how they treat potential (or in may case, past-but-potential) customers, they should go out of business.
    (Note that all I was doing wa buying a couple of rolls of quarters in order to do laundry: they weren’t losing any money on the deal.)

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    I remember going in to a bank recently to break a $20, and they wanted ID to do the transaction. What, I’m a drug mule trying to change small bills? Come-the-fuck-ON here.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    Oh, speaking of?

    That includes opening a basic deposit account, and cashing cheques
    issued by the [Canadian] government free of charge, provided each cheque is
    under $1500.

    From the original thread.

    Way back in the day I got a tax refund check from the government. Or maybe it wasn’t a tax refund check, it was another one. But point is, it was on the government’s bank accounts that this check was drawn.

    So I take it to my bank to get it cashed for cash, ’cause I want cash. yes?

    I get static from the freaking bank about a government check.

    I’m like, “Lady, the government is good for its money. Why would they stop payment on this?”

    That was just one of many reasons why I ended up refusing to bank through CIBC.

  • Amtep

    How do they get away with charging an overdraft fee and still bouncing the check? (Other than “because they can”). I thought the whole point of those fees was allegedly as an insurance against bounced checks. Does that part not even work?

  • Sereg

    If the check bounces,it’s an insufficient funds fee, not an overdraft fee. Overdraft is when your account goes negative because the bank paid the item for you, insufficient funds is when the bank doesn’t pay the item but charges you a fee for attempting it.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    Still, rather convenient for the bank that they can use the fee to basically double and triple whammy you.

  • Guest

    That’s part of the new scam: Repeatedly hitting people for the _same_ problem.

    It is probably acceptable, as society, for banks to charge people a small fee for covering debts they have racked up.

    The _amounts_ are fairly idiotic, we know exactly how much money costs for the bank to lend, and it does not cost a bank $25 dollars to lend $4 to someone for a week. But whatever.

    Likewise, it’s probably acceptable, for someone how has been given a bad check, and it didn’t go through, to be able to hit the check writer with a fine. And for that, $30 is actually somewhat reasonable.

    What is not reasonable is to get both of those. How does that even work? Either the person with the check got the money, and thus they should be happy, or the person with the check didn’t get the money, in which case the bank didn’t loan anyone any money.

    And it’s especially absurd when they do it over and over again, or do repeated minor charges.

    Here’s a fun question: Why is it $25 if you overdraft by $80 in one instance, but $200 if you overdraft in $10 increments? In what universe does the bank have more risk? It’s the exact same amount of money they loaned you!

    My solution:
    1) Require banks to charge a _percentage_ of ‘loaned’ money, not ‘per instance’, along with a single fee of $10 for being over the line which can only be charged once per month. (I.e., they can’t charge you for toggling back and forth over the line. If you’re over at any point during the month, you get dinged for $10.) Cap this percentage at 100%, which sounds like an incredibly high interest rate, but considering most people are in the negatives less than a month, and they would owe less than $100 if all the nonsense fees were remove, that works out to a max of about $8 a month, plus the $10.

    2) Bounced checks I’ll be more lax with, $30 seem fine…but the _bank_ doesn’t get to charge anything. (They didn’t give any damn money out! And, heck, they wouldn’t have charged anything if they did!) And the person with the check only gets to charge them once.

    And, perhaps just as relevantly, if someone tries to deposit a check that bounces, either they a) can charge a fee and keep trying to deposit it, _or_ b) they can withdraw the money directly from the bank account, and they don’t get to charge a fee. They don’t get to charge the penalty for a bounce check and _still immediately get their money_. Actually, I’d rather just say they only get to try one way…they can take the ‘deposit a check’ route, with the risks and whatnot that entails, or the ‘withdraw the money’, route, but not both.

    Incidentally, most banks allow you to turn off overdraft protection. They like to hide it, and not even vaguely explain what it is, but you often can turn it off. Of course, that introduces other risks.

  • DavidCheatham

    That’s part of the new scam: Repeatedly hitting people for the _same_ problem.

    It is probably acceptable, as society, for banks to charge people a small fee for covering debts they have racked up.

    The _amounts_ are fairly idiotic, we know exactly how much money costs for the bank to lend, and it does not cost a bank $25 dollars to lend $4 to someone for a week. But whatever.

    Likewise, it’s probably acceptable, for someone how has been given a bad check, and it didn’t go through, to be able to hit the check writer with a fine. And for that, $25 is actually somewhat reasonable.

    What is not reasonable is to get both of those. How does that even work? Either the person with the check got the money, and thus they should be happy, or the person with the check didn’t get the money, in which case the bank didn’t loan anyone any money.

    And it’s especially absurd when they do it over and over again, or do repeated minor charges.

    Here’s a fun question: Why is it $25 if you overdraft by $80 in one instance, but $200 if you overdraft in $10 increments? In what universe does the bank have more risk? It’s the exact same amount of money they loaned you!

    My solution:

    1) Require banks to charge a _percentage_ of ‘loaned’ money, not ‘per instance’, along with a single fee of $10 for being over the line which can only be charged once per month. (I.e., they can’t charge you for toggling back and forth over the line) Cap this percentage at 100%, which sounds like an incredibly high interest rate, but considering most people are in the negatives less than a month, and they would owe less than $100 if all the nonsense fees were remove, that works out to a max of about $8 a month, plus the $10.

    2) Bounced checks I’ll be more lax with, $25-$30 seem fine…but the _bank_ doesn’t get to charge anything. (They didn’t give any damn money out! And, heck, they wouldn’t have charged anything if they did!) And the person with the check only gets to charge them once.

    And, perhaps just as relevantly, if someone tries to deposit a check that bounces, either they a) can charge a fee and keep trying to deposit it, _or_ b) they can withdraw the money directly from the bank account, and they don’t get to charge a fee. They don’t get to charge the penalty for a bounce check and _still immediately get their money_.

    Incidentally, most banks allow you to turn off overdraft protection. They like to hide it, and not even vaguely explain what it is, but you often can turn it off. Of course, that introduces other risks.

  • J_Enigma32

    We’ve all seen how civil I can be towards trolls.

    This civility extends to banks, especially if they piss me off. I’ve done a real number on a lot of managers before, and when I deal with banks, I will, within the first few months, be red-flagged as the customer you don’t fuck with. They do not like me, and that’s fine, because the feeling is mutual and I make sure to let them know.

    Here’s a few things I’ve learned when dealing with banks; some tips for those capable of doing these things (a lot of it should be basic knowledge, but I’ve run into people who don’t have even that because nobody taught them, so here’s my PSA):

    1. To speak to a real, live person immediately rather than deal with that damn automated answering thing: rather than go to the department you want, when it’s giving you the options, telling it you’re interested in taking out a new loan instead. I can almost guarantee you that there’s a real person on the other end of that line. I do it every time, regardless what I want, because I hate dealing with the automated answering system.

    2. If you’re making loan payments, do it online. Most, if not all, banks offer that option. Make sure to copy your date, confirmation number, and the amount paid and, if possible, print off the slip. I have mine stored in a handy Excel spreadsheet that’s backed up in five different locations, including my email. They send a follow up email, and it’s done electronically through your bank account, so they’re taking out the money, and it shows up on your bank statement at the end of the month (it would if they were cashing a check, but they can cash a check whenever and checks can get lost in the mail; something they love to do. With an online system, it’s there for them the minute you click “submit”. No getting lost, no “oh, you sent it in late”, no “oh, you have to mail that down to Texas because that’s where your loan is”, none of that. All digital).

    3. The bank is your enemy. It’s not your friend. If at all possible, avoid dealing with banks altogether and join a credit union, instead.

  • Albanaeon

    Well, after a “friend” kindly wiped out my account and promptly fled the country, my bank at the time not only refused to refund the money, despite a police report and a freakin’ note the “friend” left saying what he was doing, because it hadn’t been proven in a court of law, they proceeded to levy overcharges on all the checks that suddenly bounced and low account charges because I had been robbed.

    So suddenly, I was not only broke and a whole heck of a lot of services like rent not paid for, but the bank was gleefully digging the hole deeper. And they would not let me get a loan because I had a “history” of bounced checks.

    Took nearly five years to fix all the problems that whole mess caused. I swore that I would never have anything to do with that bank again, but our wonderful financial system fixed that by selling our car loan to them. They wonderfully held true to form and found ways to extract every fee they could.

    I’d call it a gangsters racket, but gangsters have more conscience.

  • P J Evans

    One place you should know about is gethuman.com
    They have a database of ways to get past the corporate phone menus.

  • Rhubarbarian82

    Minimum account fees genuinely boggle my mind. It really is just a tax on being poor. That was the straw that made me quit Chase a few years ago; I moved into a new place and had to buy a whole bunch of new stuff – refrigerator, mattress, couch, etc – and as a result dipped just below $1500. Found out that they had implemented the minimums when they hit me with a fee, and closed my account within two months. I honestly don’t think I’ve even dropped that low since, but the credit union I switched to was better anyways for a variety of reasons.

    I could understand it a little better if the minimum account fees were 500, but 1500 is ridiculously high for a minimum that you’re going to get dinged for every time you dip below.

  • D.e. Bishop

    I have used banks, but I’m much happier with credit unions. I feel like they are actually on my side. When it comes to ripping off customers, I’ve experienced Wells Fargo to be the absolute worst! They forced me into bankruptcy with various fees upon fees upon fees. The bigger the bank, the nastier its behavior.

    Shamelessness is not a virtue.

    As someone else said, they should be shunned by the community.

  • Amtep

    Today I discovered a bank charge I hadn’t know about before: I was charged 20 cents just to check my balance. So you can’t even LOOK at your money without paying for it.

  • http://blog.trenchcoatsoft.com Ross

    Waitasec. Did they change something? Because a government check is money. Like, legally they are considered the exact same thing. I think it used to actually say on the check that it was a federal crime for a bank to refuse to cash it.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    Banks get funny about letting you have your own damn money, is all I can say.

  • http://blog.trenchcoatsoft.com Ross

    I am reminded of a line from the old sitcom ‘Dinosaurs’. “I could give you back your money. But then I’d have less money.”

  • TheBrett

    I don’t think there’s anything wrong with them, provided they and the overdraft protection coverage are “opt-in”, and the employees of the bank are very clear when opening the account for the person that getting an overdraft will involve fees.

  • Asha

    I use a small, local bank. My dad is the branch manager. You can talk to him just about any time. He’s a very nice, friendly guy, former alcoholism aside.

    Seek these banks out. They need the revenue.

  • Asha

    And in comment to myself- people call his home number to talk about loans.

  • reynard61

    What’s the difference between banks and The Mafia?

    The Mafia has better ethics and worse lawyers.


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