Below, you’ll find the Reasoning & Rationale to what we call a Bill-Request. Once certain milestones are met, as defined HERE, lawyers will be called upon to draft what will then become a Bill-Demand to Congress and the President.
Published in 2015
Overdraft fees consumed $32 Billion of mostly ordinary Americans’ money in one year recently — yes, in just one single year. And they are mostly the poor and the lower middle class who are being fleeced. Since money lent to the banks, by the Federal Reserve, was pretty much free in the year the $32 Billion got charged, you gotta wonder: why would banks be bilking our poor and struggling middle class this way? Why? Because it’d be $32 Billion less in executive compensation, bonuses, and dividends for bank bosses that year if they didn’t.
And then there are the banks that got ensnared in the act of sequencing transactions to maximize overdraft fees: Bank of America, JP Morgan Chase, Wells Fargo and Citigroup, among them. For those of you who do not know what a processing sequence scam looks like, here’s one:
John’s only got $40 in his checking account. He thinks he’s got more, but a deposit he’d been expecting had not happened. John goes to dinner with his girlfriend Jane and pays $30 for the meal with his bank card at 7 pm. At 7.30 pm, they share a cappuccino at a coffee shop for $6. John next takes Jane to a department store to buy her a gift and pays $50 for the gift with his bank card at 8 pm.
Figuring he had enough to cover the charges, John let the cashiers process all payments as credit transactions, instead of debit. The mistake should cost John just one overdraft fee, right? Not if the processing-sequence ploy kicked in. Then, the biggest transaction of $50 at 8 pm is processed first by the bank, followed by the smaller transaction of $30 at 7 pm, ending with the smallest transaction of $6 at 7.30 pm, resulting in three overdraft fees, totaling around $105, costing John more than his whole night out with Jane.
Process sequencing aside, all in all charging someone $105 in punitive fees for in effect lending that person $46 ($40 minus $30 minus $6 minus $50), for perhaps a day or two, is the stuff that would make Shylock’s of past, and loan-sharks of present, blush in embarrassment first, and then rouge in envy after.
Now, if you were lending the bank that $46, with (say) an “interest bearing” savings account that pays a whopping 0.01% (thank you, Federal Reserve), the bank would pay you less than half a penny for your loan to the bank after a whole year.
Oh, but wait, you’d probably be hit up for a fee at having only $46 in the account, for not maintaining a minimum balance of $100, or more, at the bank. And that ‘failure to maintain a minimum balance’ fee will be debited monthly from your account. The result: you end up not just paying the bank for lending the bank your money, but finish with nothing left of your forty-six bucks in less than a year. Thank you, Ben Bernanke. Thank you, Janet Yellen. To everyone inside the Marriner Eccles Building, thank you all.
There’s a short story we’d like to tell about senior citizen we know. He’s a retiree in his 80’s who makes ends meet on a small pension and even smaller Social Security check. One fine day in 2014, the old man rushed to a bank branch, just before the branch closed, to deposit a check he’d written for $200-some dollars into a friend’s account, to help that friend out with a bill that had come due. The teller time-stamped the deposit into the friend’s account around the time bank staffers had begun to lock the bank’s doors to anyone incoming.
Returning home, the old man then realized he had forgotten to deposit his pension check the day before — advancing age, he admitted, had withered his memory of things he’d normally get right in years past. Looking at his balance at his own bank, he realized he had less than the amount of the check he’d deposited into his friend’s account.
Worried stiff the check would bounce, the old man set his alarm for 7.30 the next morning, and made sure he was first in line at the door at his bank, getting there almost 15 minutes before the branch opened. He’d even pre-filled a deposit slip from a stash of deposit slips he kept at home, knowing he had a hard time writing while standing.
When the doors opened, he dutifully made his way to the teller, and handed her two hundred dollars in cash to credit into his account to settle the check he’d written to his friend. Having done so, he asked for an Activity report and was aghast to find he’d been charged $35 in overdraft to clear the friend’s check.
Since $35 represented a significant hit to his monthly budget, he pleaded with the branch manager. Denied a refund for a reason that made reference to some company policy, he pleaded next with a customer service rep and then supervisor on the phone, also to no avail. Resigned to his loss, he finally consoled himself with a decision to cut the $5 from his weekly allowance on lottery tickets “for seven weeks.”
Figuring he’d found his peace in the matter, we didn’t want to tell him that he’d been used and abused by no less than an ungrateful mega-bank that had the arrogance to bilk him (and other taxpayers) for a bailout in 2008, with no intention of doing right by those taxpayers in the years after.
Vote Now To End The Usury Of Overdraft And Its Abuse Of The Customer