The Consumer Financial Protection Bureau estimates that the median debit card purchase triggering an overdraft is $24, essentially a loan with an interest rate that, in annual terms, measures in the thousands of percentage points, according to a Bloomberg commentary yesterday. While banks could simply decline a transaction if there isn’t enough money to pay it, four out of five large American banks continue to charge overdraft fees on debit or ATM transactions, according to a report issued yesterday from the Pew Charitable Trusts. Most charge at least $35 for each overdraft. Citigroup Inc. is among the minority that don’t let customers incur overdrafts on debit transactions or ATM withdrawals. JPMorgan Chase & Co. bans ATM overdrafts but does charge a fee on debit overdrafts. Bank of America Corp. does the opposite, banning debit overdrafts but allowing ATM overdrafts.
