Bank overdraft charges

At one time I had a business client in financial distress. In reviewing the financial records I questioned a line item of $30,000 in bank fees. A little research revealed these fees were mainly overdraft fees. Almost every day checks were presented to the bank for payment against insufficient funds and the bank would pay the checks and charge the client a fee. Just think what the client could have done with the $30,000!

Today’s business section of the Cleveland Plain Dealer had a feature article about the insane fees banks are charging for overdrafts. It quoted the policy of Bank of America which can levy a $35.00 overdraft charge for each of up to ten transactions in a day. Of course, the underlying problem is poor money management by folks who write checks or use debit cards to withdraw money that is not in their account! No one should put themselves in a position of overdrafting their accounts, but banks are taking advantage of people who are not good money managers and who probably can least afford to pay large overdraft fees. There has been great concern in Ohio over the past year or two of the usurious fees charged by “payday” lenders. Are $35.00 overdraft charges really any different?

Will Limkemann
www.siqualtd.com