Why Banks Want Your Checks to Bounce

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Back in the day, writing bad checks used to be a criminal offense. Now, it’s a profit center. Banks make an eye-popping $17.5 billion a year by encouraging us to overdraw our checking accounts. Banks hold on to deposits and clear checks in a way that ensures the maximum number of bounces, regardless of when the checks were actually cashed. They let us use ATM and debit cards even when there’s no money in our accounts. Then they charge us $34 a pop for the favor. Some banks even charge extra fees for every day an account is in the red, turning overdraft “protection” into a form of loansharking, with interest rates that would make Tony Soprano blush. Except when banks do it, it’s all legal.

Tomorrow, the U.S. House Financial Services Committee will vote on a bill that might change some of this. Among other things, H.R. 946 would prohibit banks from manipulating check-clearing to enhance overdraft fees and require banks to warn customers that their accounts are overdrawn before allowing them to make a purchase with a debit card or make an ATM withdrawal. Seems sensible enough, but expect a major fight over this one, given the money involved. You can read more about overdraft abuses here.

We've never been very good at being conservative.

And usually, that serves us well in doing the ambitious, hard-hitting journalism that you turn to Mother Jones for. But it also means we can't afford to come up short when it comes to scratching together the funds it takes to keep our team firing on all cylinders, and the truth is, we finished our budgeting cycle on June 30 about $100,000 short of our online goal.

This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

payment methods

We've never been very good at being conservative.

And usually, that serves us well in doing the ambitious, hard-hitting journalism that you turn to Mother Jones for. But it also means we can't afford to come up short when it comes to scratching together the funds it takes to keep our team firing on all cylinders, and the truth is, we finished our budgeting cycle on June 30 about $100,000 short of our online goal.

This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly 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