Amplifying the Drumbeat on the “Overdraft Protection” Racket

By Ryan Chittum         Colombia Journalism Review

It’s The New York Times turn to do a nice story on “overdraft protection” practices.

The Journal had one yesterday and the Washington Post did this weekend. Today, Felix Salmon of Reuters picks up the ball and advances it, too......

....the Times has some very interesting stuff here. The argument for allowing banks like Citigroup and Bank of America to get so inordinately huge is that they become more “efficient,” lowering costs for consumers. Tell that to their customers getting slapped with overdrafts (emphasis mine):

The nation’s biggest banks — those that received the biggest bailouts from taxpayers, and are once again gaining strength — charge fees that are on average at least 20 percent higher than those at smaller lenders, according to Moebs Services, a economic research firm used by banks and federal regulators.

So your neighborhood bank, which presumably has a higher percentage cost of overhead than GinormaBankCorp, is somehow able to charge a fifth less than said behemoth. Hmm.

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