Bank fees are adding more pain to the pandemic-induced problems of some Americans. In 2019, according to the Center for Responsible Lending, major banks raised more than $ 11 billion in overdraft fees from their customers, with 9% of customers paying more than 80% of fees. In the first nine months of 2020, large bank customers paid $ 6 billion in overdraft fees, according to Rebecca Borné, a researcher at the nonprofit organization, which advocates for better treatment of consumers by financial institutions.
The total amount of fines that bank customers paid in 2020 may turn out to be less than last year, but as a large amount of fines are paid by such a small subset of customers, the impact of these fees on their finances is likely to be very worse this year.
In addition to the temporary truce that some banks have made with their customers around stimulus checks, banks have not changed their overdraft policies during the pandemic, Borné said. “Charging excessively high fees, multiple fees per day, extended fees and other practices that manipulate fees to maximize fees – these practices do more harm to those who struggle,” she said.
On Christmas Eve, Andrew Shorts, an artist who lives in Ogden, Utah, was struggling to pay his electricity bill to keep from losing energy and heating. Shorts, which does murals and graphic design projects for local businesses, has had its account blocked at Zions Bank, a Salt Lake City bank, since a rapid fire of automatic deductions for domestic accounts this fall pushed its $ 150 balance in negative territory.
When he called Zion two days before Christmas, a representative told him that he would probably have to pay the bank what it owed and pay the rest. The bank changed its policy after President Trump signed the stimulus bill on Tuesday. A spokesman said Zions cleared all negative balances of up to $ 2,000 for 30 days to allow customers to receive their stimulus money.
Mr. Shorts described the $ 600 stimulus payment as “the equivalent of a pool noodle while my wife, son, me and my now crippled business are sinking into the open sea”. But he still wants the money. In the meantime, he put his hands together just enough to pay the electricity bill.
On the day that Congress passed the latest stimulus legislation last week, Misha Roberts, a 26-year-old student at Ohio State University, did not have the heart to sign her PNC account online and check the balance. She knew it was between $ 1,200 and a negative $ 1,700, thanks to a combination of basic expense accounts that she couldn’t pay, which were automatically deducted from her account, and overdraft fees.