by. Herb Weisbaum
Bank customers may complain about hefty overdraft fees, but they’re using the service more and paying the price.
A new report from Moebs Services, a respected economic research firm, shows overdraft revenue at banks, credit unions and thrift institutions totaled $32 billion last year. That’s an increase of $400 million or 1.3 percent from 2011.
“Consumers use of overdrafts shows no indication of going away, and is actually increasing,” said Michael Moebs, who wrote the study.
At the current rate of growth, Moebs predicts revenue from overdraft fees will hit a new record by the end of 2016, topping the old record of $37 billion set in 2009.
The Moebs study found that about a quarter of the people with a consumer checking account – that’s 38 million people – frequently overdraft. The median overdraft is about $40.
More than half of the customers who frequently overdraft – 57 percent or 20 million people – go to payday lenders when they are short on funds.continue reading »