No subject

as editor of MRZine, used to receive a flood of submissions on the
subject of the "Crisis of Capitalism" from assorted leftists.  That
genre of submissions has virtually disappeared, as it became clear to
all, even leftists, that -- given the ruling-class alacrity in solving
their collective action problem and the working-class difficulty in
solving ours -- this is not a crisis of the capitalist class but a
crisis of the working class, which is apparently not as exciting a
topic for leftists as the idea of the Crisis of Capitalism.  The
biggest international news this year so far has been the Israeli
bombing of Gaza and the electoral dispute in Iran, which has even
eclipsed the first successful military coup d'etat in South America
since the end of the Cold War, let alone a little matter of bailed-out
banks' ill-gotten gains.*  I suspect a nefarious Zionist-Islamist
conspiracy to try to hoodwink international leftists. -- Yoshie

* <http://www.ft.com/cms/s/0/43d18c68-851d-11de-9a64-00144feabdc0.html>
Banks make $38bn from overdraft fees

By Saskia Scholtes and Francesco Guerrera in New York

Published: August 9 2009 22:52 | Last updated: August 9 2009 22:52

US banks stand to collect a record $38.5bn in fees for customer
overdrafts this year, with the bulk of the revenue coming from the
most financially stretched consumers amid the deepest recession since
the 1930s, according to research. The fees are nearly double those
reported in 2000.

The finding is likely to increase public hostility towards the
financial sector, which has been under political pressure to ease the
burden on consumers by increasing credit availability and lending more
fairly after being bailed out by taxpayers.

The Federal Reserve is working on rules on overdraft fees, and rules
on customer charges could be a priority of the Obama administration=92s
proposed Consumer Protection Agency if approved by Congress.

Data from Moebs Services, a research company, show that the crisis has
prompted many banks to lift charges on overdrafts and credit cards in
order to boost profits.

The median bank overdraft fee has this year rose from $25 to $26,
according to Moebs, the first time it has gone up in a recession for
more than 40 years.

=93Banks are returning to a fee-driven model and overdraft fees are the
mother lode,=94 said Mike Moebs, the company=92s founder.

Overdraft fees accounted for more than three-quarters of service fees
charged on customer deposits, he said.

The most cash-strapped customers are the hardest hit by such fees,
with 90 per cent of overdraft revenues coming from 10 per cent of the
130m checking accounts in the US. Regular use of overdrafts is most
common among consumers with low credit scores, Moebs discovered.

Banks say that the fees compensate for the risk they incur when they
pay on behalf of customers who do not have enough money in their
accounts. =93Overdraft fees are there for a reason, we take on a lot of
risk,=94 a senior banker said. =93It=92s a service to our customers, they
want us to pay their overdrafts.=94

The highest overdraft fees were charged by the largest banks, said Mr
Moebs. At banks with assets greater than $50bn =96 a group including
Citigroup, Bank of America, JPMorgan Chase and Wells Fargo =96 the
median overdraft fee is set at $33.

At BofA, a customer overdrawn by as little as $6 could trigger a $35
penalty. If the customer does not realise they have a negative balance
and continue spending, they could incur that fee as many as 10 times
in a single day, for a total of $350. Failing to repay the overdraft
within a few days results in an additional $35 penalty.

BofA said that the bank was =93committed to ensuring that our fees are
transparent and predictable. We have a range of tools and services to
give customers more control over their accounts and to prevent these
fees=94.

Chase has tiered overdraft fees =96 the first overdraft within a
12-month period is charged at $25, the second to fourth at $32 and the
fifth at $35.

Chase declined to comment.

SunTrust Bank charges the highest overdraft fee for a single overdraft
at $36, according to the Consumer Federation of America while Citizens
Bank levies a $39 fee after three overdraft items and follows with two
separate =93sustained overdraft fees=94 for repeat offenders.

SunTrust said it offered waivers and discounts as well as overdraft
protection services that made it easy for customers to avoid those
fees.

Citizens declined to comment.

The survey by the Consumer Federation of America found that five of
the ten largest banks have raised their overdraft fees in some way in
the last year.

Nessa Feddis, general counsel at the American Bankers=92 Association
said the higher fees are appropriate because big banks do not know
their customers as well as small community banks, and need to be
compensated for the higher risk.

Consumer advocacy groups point to very low loss rates on overdrafts
for all banks and argue that overdrafts are the least risky form of
credit, while being the most expensive for consumers.

Eric Halperin, director of the Center for Responsible Lending said:
=93The banks own your pay check before you do, so the only way you can
default on your overdraft is if you choose to open another account and
deposit your income elsewhere.=94