The Finance Lobby

If you use your debit card and overdraw your account, your bank will hit you with an overdraft fee.  If you make five purchases of ten dollars each on the same day, you’ll get five more overdraft fees.  And just to make sure you get hit with as many fees as possible, your bank will make sure to debit your biggest transaction of the day first — even if it was actually the last one you made that day.  That way your account goes to zero faster and every subsequent debit triggers another fee.  Ka-ching!

That’s all bad enough, but there’s one more thing: you have no choice in the matter:

Sen. Christopher J. Dodd (D-Conn.) plans to introduce legislation requiring banks to get permission from customers, rather than allowing overdrafts automatically. If customers decline and then try to overspend, the transaction would be rejected. A similar bill is pending in the House.

Dodd dismissed concerns about the impact on ailing banks. “People out there are getting whacked,” he said. “They should have the right to say, ‘Deny me the transaction.’ “

Well, good for Chris Dodd.  I hope his legislation passes.  But seriously, ask yourself this: what does it say about the power of the finance lobby in America that this was ever legal in the first place?  I mean, it’s not even a close call.  It’s just flatly outrageous.  It’s outrageous that banks should be allowed to charge fees that amount to 1000% interest rates on a short-term loan; it’s outrageous that they should be allowed to reorder your debits to make you pay more of these fees than you should; it’s outrageous that they should be allowed to charge multiple fees per day in the first place, since they’re essentially just making a single loan; and it’s outrageous that they should be able to do this whether you want them to or not.

Let’s say that again: They can force you to accept a loan at 1000% interest whether you want it or not.  And no one before now has been able to stop them.

Think about that the next you see one of those happy happy happy Visa debit card commercials where they’re exhorting you to just swipe that card for every purchase you make without giving it a second thought.  There’s a reason for that.  And there’s a reason they can get away with it.

One More Thing

And it's a big one. Mother Jones is launching a new Corruption Project to do deep, time-intensive reporting on the corruption that is both the cause and result of the crisis in our democracy.

The more we thought about how Mother Jones can have the most impact right now, the more we realized that so many stories come down to corruption: People with wealth and power putting their interests first—and often getting away with it.

Our goal is to understand how we got here and how we might get out. We're aiming to create a reporting position dedicated to uncovering corruption, build a team, and let them investigate for a year—publishing our stories in a concerted window: a special issue of our magazine, video and podcast series, and a dedicated online portal so they don't get lost in the daily deluge of headlines and breaking news.

We want to go all in, and we've got seed funding to get started—but we're looking to raise $500,000 in donations this spring so we can go even bigger. You can read about why we think this project is what the moment demands and what we hope to accomplish—and if you like how it sounds, please help us go big with a tax-deductible donation today.

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate