Has A Bank Ever Stuck You With Overdraft "Protection?" It's a $17.5 Billion Annual Rip-Off

Last week the Washington Independent published a piece I've been meaning to pass along about how the banksters and their congressional shills have dug in their heels on proposed reforms to their $17.5 billion overdraft fee scam. What brought it back to mind was a story I saw about how right-wing Big Business groups and their lobbyists are relentlessly attacking Elizabeth Warren, Congress' financial rescue oversight chief. They were never happy that a real reformer instead of a Wall Street apologist-- a Geithner or Summers-- got the job and as they see her effectiveness, they're starting to panic. Their hatred of her began with their pocketbooks; they've "long disliked Warren for highlighting predatory lending and abusive credit card fees," which in the self delusioned boardrooms of Banksterland means she's a socialist.

And that brings us back to the Washington Independent and their exposé of this one area of banksterism that affects so many consumers:

It happens all the time. A thirsty consumer grabs a cup of coffee with a debit card, unknowingly exceeds the available balance, and gets smacked with a $30 fee for the $3 purchase.

The banks call it overdraft protection-- the usually automatic loan fronted by institutions to cover purchases even when checking accounts have run dry. And they consider it a service to customers. But critics argue that the industry has adopted a slew of abusive tactics to maximize the frequency of these loans-- and the considerable fees that accompany them.

New York Congresswoman Carolyn Maloney has taken the lead in trying to protect consumers against the avaricious banksters who see abusive overdraft fees as their due after pumping $2.2 billion in legalized bribes into congressional coffers since 1990 (on top the $3,441,172,596 in indirect payoffs through their crooked lobbyists, just since 1998). No one thinks Maloney is likely to have any easy job persuading her Democratic colleagues to go along with her-- and, of course, it is pointless to even try to persuade the Republicans, who have vowed to obstruct all attempts to reform anything to do with overdraft protection for consumers.

Among the most controversial, most banks automatically enroll customers in the overdraft protection program, without their knowledge or consent. Also, most institutions manipulate the order of purchases, often increasing the number of overdraft transactions. And there is no system in place warning shoppers when they’re poised to buy something that will send them into overdraft territory.

The bankster sector (finance/insurace/real estate) is the biggest source of bribes going to members of Congress and the corrupt political hacks on both sides of the aisle don't want to upset the apple cart despite overwhelming agreement that this sector is almost entirely responsible for the current economic catastrophe gripping the nation and wrecking millions of American families. Americans are furious over the bailouts and the special deals the crooked banksters are getting at taxpayer expense. Who would have imagined that a right-wing dittohead like South Carolina Congressman Gresham Barrett would have been booed so unmercilessly by Greenville teabaggers on Friday? But they knew that despite Barrett's shameless pandering, he's taken $786,873 from banksters and voted for their special interests every single time he had the opportunity to-- including the huge bank bailouts Bush asked for before leaving office. Barrett wants to run for governor; he better hope he doesn't get a strong primary challenger.

But Barrett is hardly the only shill on the House Financial Services Committee voters have to be wary of. Among the other members on that committee who oppose Maloney's legislation to protect consumers are over a dozen who have taken over $1,000,000 in bribes each from the banksters:

Spencer Bachus (R-AL)- $3,789,474
Ed Royce (R-CA)- $2,506,414
Michael Castle (R-DE)- $2,448,112
Jeb Hensarling (R-TX)- $2,111,371
Melissa Bean (Blue Dog-IL)- $1,725,806
Ron Paul (R-TX)- $1,686,375
Jim Gerlach (R-PA)- $1,578,152
Shelley Moore Capito (R-WV)- $1,554,325
Judy Biggert (R-IL)- $1,480,270
Don Manzullo (R-IL)- $1,388,429
Peter King (R-NY)- $1,385,668
Randy Neugebauer (R-TX)- $1,253,775
Scott Garrett (R-NJ)- $1,156,599

And in the undecided but untrustworthy column are a whole slew of crooked operators on the committee. These are just the ones who have sucked up over $1,000,000 each:

Paul Kanjorski (D-PA)- $3,185,464
Dennis Moore (Blue Dog-KS)- $2,105,848
David Scott (Blue Dog-GA)- $1,136,104

Maloney's bill prohibits "automatic enrollment in a bank’s overdraft protection program, instead requiring the customer to opt-in to participate. It would also alert debit card users at the ATM or the coffee counter if they were about to exceed their balance, allowing the shopper to opt-out of the purchase to avoid the penalty fee. Finally, the bill would prohibit any reordering of purchases that leads to an increase in overdrafts."

The banksters will fight it with all their might and even if it passes in the House, the Senate doesn't even have a companion bill in the hopper yet. But the Senate does have an awful lot of members who have taken more than a million dollars in bribes from the bankster sector. It's why DWT is always talking about campaign finance reform. Without it we will always be at the mercy of those with the most money and the willingness to invest it in crook politicians.



And if you're wondering why I mentioned that it's pointless to even try to persuade the Republicans to stand up to the banksters on behalf of consumers (but didn't click the link), let me quote the introductory paragraph of Matt Taibbi's latest and most bestest Rolling Stone screed:

Following the Republican Party of late has been a movingly depressing experience, sort of like watching Old Yeller die-- if Old Yeller were a worm-infested feral bitch who spent the past eight years biting children at bus stops and shitting in neighborhood swimming pools. As a useful force in American politics, the Republicans have been dead for a while now. But in the seven months since Sarah Palin's nomination, they have taken on an intriguing new role: providing much-needed comic relief during dark times, serving as the unofficial rodeo clowns of the Financial Crisis Era.

Dead? Maybe. But their backers have merely moved in to take over Democrats, Inc. And with Rahm Emanuel in the White House and Steny Hoyer the House Majority leader and with Evan Bayh's anti-Obama bloc making common cause with Republicans to prevent the change Obama campaigned on, they're doing pretty well. Not that that's prevented them from raising ruckus after ruckus, in a never-ending veritable rage of the rich, whenever they get an inkling that their entitlements and privileges are coming under any kind of attack. From New York's "Wail of the 1%":

“No offense to Middle America, but if someone went to Columbia or Wharton, [even if] their company is a fumbling, mismanaged bank, why should they all of a sudden be paid the same as the guy down the block who delivers restaurant supplies for Sysco out of a huge, shiny truck?” e-mails an irate Citigroup executive to a colleague.

“I’m not giving to charity this year!” one hedge-fund analyst shouts into the phone, when I ask about Obama’s planned tax increases. “When people ask me for money, I tell them, ‘If you want me to give you money, send a letter to my senator asking for my taxes to be lowered.’ I feel so much less generous right now. If I have to adopt twenty poor families, I want a thank-you note and an update on their lives. At least Sally Struthers gives you an update.”

It is difficult to sympathize with these people, their comments laced with snobbery and petulance. But you can understand their shock: Their world has been turned on its head. After years of enjoying favorable tax rates, they are facing an administration that wants to redistribute their wealth. Their industry is being reordered-- no one knows what Wall Street will look like in a few years. They are anxious, and their anxiety is making them mad.

Their anger takes many forms: There is rage at Obama for pushing to raise taxes (“The government wants me to be a slave!” says one hedge-fund analyst); rage at the masses who don’t understand that Wall Street’s high salaries fund New York’s budget (“We’re fucked,” says a former Lehman equities analyst, referring to the city); rage at the people who don’t “get” that Wall Street enables much of the rest of the economy to function (“JPMorgan and all these guys should go on strike—see what happens to the country without Wall Street,” says another hedge-funder).