Overdraft fees at U.S. banks rose nearly 10% in a 5-month period last year. The Chicago Tribune has reported that the median price of an overdraft rose $2.50, from $27.50 in June 2011 to $30 in November.
The information comes from a study performed by economic research firm Moebs Services Inc., which says it’s never seen such a large increase in such a short period of time.
Banks blame the increase on the overdraft regulations contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act. The law, they say, is killing overdraft revenue, which dropped a startling 10.9% in 2011 to a mere $29.5 billion.
What banks aren’t highlighting is the fact that, until now, revenue from overdraft fees climbed steadily from 2000 to 2009 – at an average of more than 10% a year. They were raking it in, even as they were also making oodles on servicing and sale of all those ill-advised mortgages.
The comedown must be difficult.
But there is one group that doesn’t seem to mind the rising overdraft fees.
Those sleazy payday lenders now provide more transparency on the fees they charge than the banks themselves. And they’re making a straight-faced case that, when the bills are due, a payday loan is cheaper than than overdrawing your bank account – even with overdraft protection.
