American Airlines Federal Credit Union is among the many financial institutions making significant revenues from overdraft fees.

Pew Charitable Trusts indicates excessive overdraft fees have become an acceptable practice as banks more than doubled their revenue from fees and service charges between 1984 and 2015.

Consumers are likely to view overdraft fees like those from American Airlines Federal Credit Union as a hardship, , but these same fees are seen by banks as a way to diversify their sources of revenue.

“Income from fees for services has grown considerably over time,” states Pew’s website. “In 1984, fee revenue was small compared with income earned from interest. By 2015, this gap had narrowed substantially.”

Overdraft Fees at American Airlines Federal Credit Union

American Airlines Federal Credit Union charges $25 per overdraft.

The credit union calls its standard overdraft protection Bounce Protection, which covers check and ACH transactions. American Airlines Federal Credit Union promotes its Bounce Protection Plus enhanced overdraft coverage, which promises to protect ATM and debit card transactions for only one penny per overdraft item.

What’s the catch? When you read the fine print, you see that American Airlines Federal Credit Union will charge you the full $25 overdraft fee in addition to the one penny if you fail to “correct the overdraft before 8:00 pm (CST)” or if the offending overdraft dropped your end-of-day account balance to an amount more than $10 in the negative.

“Opt in today so you won’t be left at the check-out counter!” says the website supporting Bounce Protection Plus.

According to Pew, almost 80 percent of banks have a system similar to Bounce Protection Plus that allows ATM and debit transactions to incur overdraft fees instead of simply declining a transaction.

U.S. banks that held assets of more than $1 billion reported more than $11 billion in overdraft fee and non-sufficient funds revenue, amounting to nearly two-thirds of all consumer deposit account fee revenue.

Unfortunately for consumers, more than 40 percent of the banks showed they process transactions from the largest to smallest dollar amounts, reducing bank account balances at a faster rate, which results in more overdraft fees.

The standard charge at most banks is $35 fee per overdraft occurrence. Moreover, overdraft fees are fixed, meaning the excessive overdraft fee will remain the same whether the account is overdrawn by $10 or $200.

The Consumer Financial Protection Bureau (CFPB) reports that of all the ways a transaction can be made, debit cards hold the lowest median value, $24, of financial transactions that lead to overdrafts. The median overdraft fee was $34. The CFPB says, “Such a loan would carry a 17,000 percent annual percentage rate.”

If you believe you have been charged excessive overdraft fees by American Airlines Federal Credit Union or any other financial institution, you could be eligible for compensation. A lawyer can help you sort your options.

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