Credit unions need to move on from overdraft fees, and here’s how
Inside of one work week, Keri Fitzpatrick, a cook at her local middle school in Peterborough, N.H., was penalized for the $175 she didn’t have in her bank account.
Her story, featured in the New York Times, explained that a line of automated payments over the next few days – her cell, auto insurance, and two credit cards – put her bank account in the red, loaded on top with $140 in overdraft fees. Add insult to injury, yet another unexplained penalty fee jumped on the pile at the end of the week. Fortunately, her paycheck came through, too. Not that it helped her credit score.
Fitzpatrick blames herself, claiming she should have been keeping a closer eye on her money. But it’s always surprising how fast the transactions pile up, she said, especially with a susceptible account. “It’s not like one fee comes out for one day. It is $35 for each of those. It’s just outrageous.”
Many executives in the financial services industry seem to be coming around to Keri’s perspective when they see the effects of serving up a ladle full of overdraft penalties their own members or consumers cannot afford.
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