Banks stand to collect a record $38.5 billion in overdraft fees.
Geoff Williams
Every time we hear that bank overdraft fees are worse than ever, and then someone does a little digging on the subject, the news just seems to get even more ugly.
London's Financial Times published an interesting story over the weekend about bank overdraft fees, focusing on research done by Moebs Services, an independent research firm that collects data about financial institution services, pricing, operation expenses and other interesting gems.
Well, prepare to get really angry, even though I don't think any of their findings is all that shocking (interesting, yes... shocking, no). But maybe I'm just too entrenched in researching and writing about bank fees to be easily surprised.
Moebs found:
Banks will likely collect, by the time the year is up, $38.5 billion in bank overdraft fees. That's a new record.
That to find another recession in which bank fees have gone up, you'd have to go back 40 years to the 1969 recession. The average bank fee this year rose from $25 to $26 (though since we're talking averages, yes, plenty of banks charge into the $30s for their fees).
The people who are paying the most overdraft fees? And I found this statistic compelling: 90% of overdraft money comes from 10% of the 130 million checking accounts in America.
Overdraft fees make up 75% of all bank fees.
If you have a low credit score, you're most likely to be paying overdraft fees.
The largest banks are lodging the largest overdraft fees.
Banks where the assets are greater than $50 billion, the average overdraft fee is $33. We're talking places like Bank of America, Citigroup and Wells Fargo.
But (and, yes, you should detect some sarcasm on my part) don't get too angry about all of this. According an anonymous senior banking official quoted in the Financial Times, overdraft fees are "a service to our customers. They want us to pay for their overdrafts."
http://www.walletpop.com/blog/2009/08/10/banks-stand-to-collect-a-record-38-5-billion-in-overdraft-fees/
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P.I.
