Monday, April 20, 2009

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).

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At 2:26 PM, Anonymous john paul jones said...

The bad check charge fee is the perfect example of what the banking system has become. They are thieving crooks who rob and steal from their customers at ever opportunity. This robbery is committed against those who can least afford it. People who are on the financial edge. A deposit is made and then not credited in time to cover several checks that often times are mailed in hopes of avoiding shut offs or penalties. Poor people often fool themselves in hopes of keeping their heads above water and in an attempt to survive. The banksters of course run the big check first so all the little ones will bounce too, thus maximizing their robbery. Sometimes hundreds of dollars in fees often exceeding the amount of the checks. Now the hapless public can't cover the bills at all because the banks have robbed them. These crooks have no shame, taking advantage of those most vulnerable adding to their stress and misery. The banksters get $17.5 billion for providing nothing to the customer but a giant butt fucking. Of course, America is the butt fuck capitol of the world.

The government should protect its citizens from robbery but the politicians are all bought and paid for by the robber corporations and think only of how much money they can raise from them for their next re election. They sanction stealing and usury. They too have no shame.

If you don't like it you can always go the the Pay day loan sharks another non wealth producing bunch of crooks.

At 6:50 PM, Anonymous john paul said...

It seems like the time to discuss the Mutual fund racketeers. For along with the banksters they have been systematically ripping off the public with their numerous fees and charges while producing low returns for quite awhile. As long as the market is going up the public doesn't think about these fees and charges. The public has been led to believe they can't invest for themselves but anyone with half a brain should be able to do better than these imposters. This racket has made a lot of very mediocre people quite rich. Banks, wall street, Mutual funds, insurance companies, HMOs, drug companies (millions of tons of this crap in our water supply), gun manufacturers. These are the organized criminals, not the mafia. Our phantom industries that produce nothing of real value. What have they produced but a pile of worthless paper money and equity in a bunch of nothing?

We sit around wondering why our system is broken when it's pretty obvious with all these leeches stealing what should be humanities common wealth running around to their non wealth producing jobs fooling themselves and others.

Can't you just hear Pink Floyd's "Money" playing in the background?

At 8:56 PM, Anonymous Anonymous said...

“The government wants me to be a slave!” says one hedge-fund analystYes, we all recall the shameful history when slaving ships went to Africa and raised the tax rates of the wealthiest locals from 36% to 39%.
These people deserve a major ass-kicking.

At 7:51 PM, Anonymous Anonymous said...

"The bad check charge fee is the perfect example of what the banking system has become. They are thieving crooks who rob and steal from their customers at ever opportunity."

Stop blaiming the system. You should be penalized for passing bad checks. A check is a legal contract which is endorsed by your signature. When you sign a check you are making a promise to the consignee that you will pay the written amount. You should be happy that we live in a civil society that applies only monitary penalties and in the worse case, imprisonment for breaking this contract. In a less civil society, your legs would be broken, or your fingers chopped off.

I have in the past, lived paycheck to paycheck and paid penalties for insufficient funds, but instead of whining about it, I quikly learned how to work with the system rather then against it. I raised my credit score from 535 to 761 in 2 years and I now live well within my means. I am able to comfortably pay my monthly obligations which average over $4000/ month. ... Not bad for a high school and college drop out.

These are in part, a demonstration of the principles of conservatism... Either you contribute to society or your doomed to forever occupy it's lower ranks.

Make a decision. You only owe it to yourself.

At 3:21 PM, Anonymous Anonymous said...

Hey Anonymous 7:51PM: Aren't you the self righteous fuck. Taking the side of banks who charge $35. for covering a $5. check. Now you are perfect. Can I tell you something, nobody gives a shit about your perfection.

At 5:04 AM, Blogger BRIAN JONES said...

hey annonymous at 3:21 pm:
amen! i just got raped by BofA. overdrew myself with that wonderful debit card they always try to cram up your ass a whopping 25.61. which they charged me 4 overdraft charges @ $35ea.

Best part was i had deposited money to cover that amount then deposited enough to cover my insurance payment. i double checked my balance before i left the atm to see if i got hit with overdraft charges and still had enough. made my payment, then rechecked my account... oh, wow, there's those overdraft charges the atm failed to tell me about...

oh, wow, now my insurance payment just bounced, because the overdraft charges that were not there 30 minutes ago just ate the money for my payment. and now that we have ELECTRONIC AUTOMATIC RESUBMISSION, i keep getting hit with ISF: ITEM RETURNED FEE $35.00...

so now that i have been hit 7 times with fees from a 25.00 mistake, that 25.00 has cost me 245.00 and counting. even better, i get paid once a month and this started just after the 7th... after i paid all my bill's and am broke with no way to stop the fee fest till my next check.

you really wont get any help when you call them. they feel they have "EARNED" the money and are happy to regurgitate the fine print in the papers you signed when you opened your account.

i dont give a flying rat's ass about fine print. in fact fine print sickens me, literally! have any of you looked at fine print lately? heres the sumarry: you have no rights except to pay us [states have found the need to create specific laws so companies cannot sign your rights away], the most we will give you is a refund if the ARBITRATOR [court system not friendly to your causes] finds us at fault [not likely], if our product self destucts - causes harm or death - or puts you out in any way - too damn bad! we have the right to charge, do, say, change, ban, or whatever we may think of later without notice, whatever the hell we want to!

there ya go, thats modern day fine print summed up... no one would sign it, but it's everywhere you look now. we have become de sensitised to it. we all click agree, we all skim the 20 pages of legaleze and sign. hoping we didn't just sign our first born away.

i have had day's where if i actually read what i was agreeing to, i would barely make it past microsofts eula. not because it is THAT long, but to look up the meaning of the leagal terms used in it. then on to install adobe reader, then firefox and the eula's that come with those. they are all legally binding, you should read what you are agreeing to right?

i dont know about you, but i have better things to do than read the license agreements i am bombarded with. you have to agree or you cant install it. i have yet to click dont agree, nor have i seen anyone else do so.

i could go on, but it's seriously past my bed time. i have to go to work tomorrow so i can pay the bank it's hard earned money AND my bills with what they decide to leave me.

goodnight :)

At 1:00 PM, Blogger D. Patrick Caldwell said...

I've been browsing articles on blogspot about overdraft fees and I found yours. I've been interested in this topic for some time now. I feel like the financial industry intentionally takes advantage of the disadvantaged. I've concocted a short (2 question) survey to look specifically at overdraft fees and level of income.

Would you mind terribly if I leave this comment soliciting responses from your readers?

The instructions are simple:
1) Take the survey
2) Give these instructions to everyone you know

Thanks a million,
Patrick Caldwell


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