The unfair banking practice costing customers billions

Your total for that gallon of milk will be $37 — $2 for the milk and $35 for overdrawing your bank account.

Every year, banks rake in billions on predatory overdraft fees that hit low-income and vulnerable customers the hardest. Customers deserve transparency from their banks on overdraft policies — and they need protection from repetitive punitive fees.

Tell your U.S. representative to protect average Americans and support the Overdraft Protection Act.

Overdraft fees take place when a customer makes a purchase that exceeds the funds in their checking account. Banks will cover the charge, apply a fee, and collect the balance when funds are next available.

That sounds fair in theory — but in practice, banks often use opaque rules and unfair charging practices.

Legally, banks can’t charge overdraft fees without the customer’s consent. If customers decline overdraft coverage and make a purchase that would exceed their balance, that purchase would be declined. If they opt into an overdraft program, the purchase goes through — and they incur the fees.

But this gets sticky when banks misrepresent how the overdraft coverage works. When banks present the opt-in as mandatory, customers agree to pay fees without knowing that they could have avoided them.

Customers deserve transparency — tell your representative to ensure they get it.

Making things worse, many banks have adopted the practice charging multiple fees — sometimes leading to charges of over $200 in a single day. Some banks have even reordered transactions to apply more overdraft fees.

These unfair practices have allowed banks to collect more than $11 billion each year. And they disproportionately harm low-income and vulnerable consumers — sometimes even forcing them out of the banking system altogether.

A small transaction shouldn’t cost consumers hundreds.

That’s why Fair Share is supporting the Overdraft Protection Act. This bill would require banks to provide greater transparency on overdraft protection programs, and it would limit banks to charging a maximum of one overdraft fee per month and six fees per year.

Tell your representative to be an advocate for fair banking practices.