Overdraft fees at Pentagon Federal Credit Union and other financial institutions made billions of dollars for banks and credit unions.

In fact, overdraft protection is big business for the financial industry.

In 2015, CNN Money and SNL Financial reported that America’s three largest banks earned more than $6 billion from ATM and overdraft fees.  JPMorgan Chase, Bank of America and Wells Fargo shared that huge pocket of change.

Americans pay more than an average of $4 each time they withdraw their own money from an out-of-network ATM, states Bankrate.

Laws changed, ensuring that banks had to publicly disclose how much money they made in ATM and overdraft fees beginning in 2015.

Many consumers feel banks should be embarrassed and ashamed for taking so much profit from the people who are financially struggling the most.

Overdraft Fees Cost Us

An overdraft fee is generally around $34 but a study by the Consumer Financial Protection Bureau determined that most overdrafts happen because of transactions of $24 or less.

“Consumers who opt in to overdraft coverage put themselves at serious risk when they use their debit card,” said Richard Cordray, director of the Consumer Financial Protection Bureau.

Bank and credit union customers are able to opt out of ATM overdrafts, which would mean they could not obtain money from an ATM if their account balance fell below $0.

However, banks can still charge a fee if a cashed check or automatic payment sends the balance below $0.

Consumers are getting tired of overdraft fees at Pentagon Federal Credit Union and other financial institutions.

Overdraft fees at Pentagon Federal Credit Union include a $500 overdraft line of credit that is automatically given to qualifying members.

This line of credit takes the place of non-sufficient funds fees of $30 per incident and uncollected funds fees of $10 each.

Many consumers are opting for the standard overdraft protection, which links the checking account to another account at the bank or to a credit card. When the checking account is overdrawn, the linked account covers the amount for a relatively small transfer fee, usually around $5.

Just as the overdraft fees at Pentagon Federal Credit Union include a line of credit, banks can provide this as well. If a line of credit is used, most of the time there are interest charges on the advanced dollar amount.

Ways to Maximize Overdraft Fees

Some financial institutions have been accused of posting debits and credits in a certain order to maximize the number of overdraft fees they can collect.

It’s no surprise that approximately four percent of operating revenues for the biggest banks last year were generated through overdraft fees from consumers, according to SNL Financial.

ATTORNEY ADVERTISING

The choice of a lawyer is an important decision and should not be based solely on advertisements.