$31.5 billion in overdraft fees by banks in the past year

The financial crisis was supposed to spur a new era of frugality and fiscal responsibility. It doesn't exactly appear to be working out that way. Americans are once again increasingly overspending what they have in their checking accounts. In all, consumers were hit with $31.5 billion in so-called overdraft fees by banks in the past year, according to a new study from bank research firm Moebs Services. That compares to $30.8 billion in the same period a year before.

That was below the peek of $36.8 billion in the same period in 2008. But this year is still the first time overdraft fees have risen since the financial crisis. From mid-2008 to mid-2011, the number of times consumers were hit by overdraft fees had fallen by roughly a third. Now in the past nine months, the levying of overdraft penalties appears to be on the rise again, up 10% in the past nine months.

The question is whether this a a result of shady bank practices or poor money management. On the margin, it appears that overdraft fees have gotten a little more fair. Banks have shelled out hundreds of millions to settle claims that they re-ordered consumer purchases in order to trigger overdraft penalties as often as possible. And the Card Act made it illegal for banks to automatically enroll customers in overdraft protection, limiting the number of people who get hit with fees they didn't even know about. Read more >>