Overdraft Fees Are Staggeringly Profitable
Big banks have had a rough several years. They, you know, participated wholeheartedly in the near-vaporization of the global economy. They have to make up those losses somehow. Fees are the answer to everything! Do you know how much your bank is charging you, for nothing?
A new report out from the Consumer Financial Protection Bureau today takes a look at bank fees, and how they are, by and large, ridiculous examples of extortion. (Banks know that you know this, which is why their fees have been getting ever stealthier.) Since consumer outrage killed the whole "debit card fee" idea a couple of years ago, banks are now turning to overdraft fees to fill their hungry coffers. And naturally, big banks are screwing their customers much worse than smaller banks. From the WSJ:
At banks with more than $25 billion in assets, the median overdraft fee was $35 at the end of 2012, according to Moebs. Banks with less than $100 million in assets charged a median price of $25... Last year's total of $32 billion in overdraft fee revenue was up 1.3% from 2011.
Hmm, $32 billion in annual overdraft fees, to the banking industry, for providing a "service" that does not involve any real work on their part. Seems... reasonable. Another fact you might be interested in knowing is that over the past five years, tens of millions of customers have moved their checking accounts out of huge banks and into smaller banks. Totally unrelated.
