Dems Slam Bank Overdraft Fees

Banks are set to make $38.5 billion on overdraft fees this year

By Mat Probasco, Newser Staff

Posted Sep 21, 2009 2:34 AM CDT

(Newser) – Washington Democrats are using words like "criminal" and "rip-off" in a round of complaints about banking overdraft fees, reports the Washington Post. US banks are poised to rake in some $38.5 billion from overdraft fees this year, usually without a warning to customers that they're about to draw too much money out of an account.

"People out there are getting whacked," complained Sen. Christopher Dodd, who plans to introduce a bill requiring banks to get customers' permission, rather than automatically allowing overdrafts. "They should have the right to say, 'Deny me the transaction.'" Overdraft fees at large banks have increased an average 4% this year, with banks charging an average $35 per overdraft.

[Images (3)]

[Quotes (1)]

Senate Banking Chairman Christopher Dodd complains that consumers are getting "whacked" by overdraft fees. (Getty Images)

WASHISenate Banking Chairman Christopher Dodd speaks during a news conference on Capitol Hill. (Getty Images)

A man uses an ATM in Miami, Florida. He in for stiff overdraft fees if he takes out too much money. (Getty Images)

« Prev« Prev | Next »Next » Slideshow

Banks should understand that they can't have it both ways. If that should falter, then we will pass a tough overdraft bill. - Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee

« Prev« Prev | Next »Next » Slideshow

To report an error on this story, notify our editors.

OTHER STORIES ON OUR RADAR

Getty Images

35 Brutally Honest Reasons Men Say No to Sex (The Stir)

Man in Mugshot Explains Why He Has Half a Head (HuffPost)

These Exes Were Spotted Making Out … and That's a Bad Thing (Bleacher Report)

Help! I'm Having an Incestuous Relationship With My Twin (Slate)

Which Celeb Dedicated Song to Her Famous Husband Despite Divorce Rumors? (NewsOne)

Partner Links

A snapshot of the day's best news stories.

View Larger Grid

All Today Yesterday Pick a Date

COMMENTS

Read the comment policy

Showing 3 of 22 comments

chasingjoy

Sep 23, 2009 4:01 AM CDT

you went a little too far with that last statement. Intelligent people make errors. What an arrogant, incompassionate old goat you are!

oldgoat

Sep 22, 2009 8:13 AM CDT

What a bunch of whiners. Guess what if you don't buy more than what you have in the bank you won't get overdraft fees. If anybody had read in the beginning that one time fee up front can save you a lot of money if yuo don't have the overdraft protection. You don't really believe that the business is also going to forgive you? Also think about if you don't pay you will get a ding against you on your credit report. Actually people don't learn from this and that is a problem. Some expect you to pay the bill, even if you don't have the money to cover it. Also you might want to know that the banks also pay on the order of the debt type. I believe that there are three different classes. Now you can blame the banks for your failure to maintain a balance or be big boys and girls and learn how to maintain one, and if you don't have the money don't write a check or debit. They have this other little card called a credit card for when you want a loan.

odowd80

Sep 21, 2009 12:24 PM CDT

The dems passed the credit card reform bill. What makes you think they won't pass this bill too?

What's Popular Now on Facebook

Guy Buys $123 Safe on eBay, Finds Major Cash Inside

Goats Have Accents: Study

Washington Post (Source Grid »)

Politics • Money

Chris Dodd • banks • overdraft fee

More Newser Stories

Reid Delays Anti-Piracy Vote

As Republicans solidify PIPA opposition

(NEWSER) - Harry Reid has postponed Tuesday's test vote on the Senate's anti-piracy bill, after a storm of online protests convinced several of the bill's co-sponsors to switch sides, the AP reports. Democrats have now emerged as the main backers of the PROTECT IP Act, the Wall Street Journal reports; at least 14 Republican senators came out against the bill following the protest, compared to seven Democrats, and Mitch McConnell had called on Reid to postpone the vote. More»

Bank Failures Far From Over

Failures down in 2011, but weak banks are taking longer to recover or die

(NEWSER) - Bank failures were down significantly in 2011, but that doesn't mean banks are getting healthier—it just means sick ones are taking longer to die, the Wall Street Journal finds. Some 92 banks failed last year, down from 157 in 2010. But many of 2011's casualties were in weaker shape than the banks that failed in 2010. There are still 844 banks on regulators' problem-bank list, and analysts expect many more undercapitalized banks to fail over the next two years. More»

To Get New Credit Card: Pay Off Expired Debt?

Feds have fined debt collector for deceptive practices

(NEWSER) - Americans burdened with old debt and low credit ratings are getting an unlikely offer in the mail: a new credit card. But the fine print explains that accepting the card means reviving debts that had expired by law, the Wall Street Journal reports. For one New York deli owner, the debt transfer was "totally worth it" because he felt "like dirt" without a credit card, particularly on dates. To get his new plastic, he paid $400 on a seven-year-old debt that, yes, was expired. Others say the practice is deceptive and illegal. More»

Lobbying Firm to Banks: We'll Cripple Occupy

Former Jay Boehner employees drummed up $850K plan

(NEWSER) - So John Boehner's old employees are at least trying to profit from Occupy. Sam Geduldig and Jay Cranford, partners at a well-known Washington lobbying firm, are two authors of a proposed $850,000 scheme to drum up negative stories about Occupy Wall Street and any politicians who support it—in other words, Democrats. The firm, Clark Lytle Geduldig & Cranford, sent the offer to the American Bankers Association, MSNBC reports. More»

How a College Grad Helped Sink BofA's Debit Card Fee

'That is it. I'm sick of this,' Molly Katchpole said of the bank plan

(NEWSER) - Bank of America's $5-debit-card-fee hit the dustbin after "a great deal of feedback from customers," it said—but the bank didn't mention a 22-year-old college grad who got angry enough to rally 360,000 signatures against the plan. "I heard the news about the fee and was like, 'That is it. I'm sick of this,'" says Molly Katchpole of Washington, DC. So she turned to Change.org , a website that posts petitions and helps organize community campaigns, reports Time . More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

Dems Slam Bank Overdraft Fees