In the book "The Big Short", Michael Lewis mentions how one CEO admitted to an audience that free checking accounts were simply a way of screwing over poor people for all these additional fees, like overdraft, etc. It's really because people with less money need to spend more time managing their money because they are closer to drawing down the account, and the banks are betting on this. It's basically predatory bank…
It's the exact type of behavior I would expect from a bank. From an American bank. There is no German, Dutch or French bank that does that and I doubt Spanish, Italian or Swiss banks do it. Sure, if I overdraft, I pay (serious) interest over the amount overdrawn for as long as I am overdrawn, but you aren't hit with any fine at all. In fact, I have arranged that I actually can't overdraft. Automatic bills just bounce…
Re: The $36 soda: Overdrafting in America
#141More generally: from an unregulated bank. The tradeoff that came out of the Great Depression was that the government insures bank deposits, and in exchange the banks agree to be bound by rules that enforce responsibility - both fiduciary and to their communities. Over the past 20 years, the American banks have succeeded in shedding many of the regulations that used to bind them to those terms of responsibility. Not only has that resulted in more cynical and opportunistic 'service' to customers, but also it has resulted in the financial instability that led to the big crash of 2008.