“There Are Fees for Everything but Breathing the Air”

November 25, 2015, 1:30PM. By Gordon Gibb

Washington, DCAnyone contemplating or having already filed a Credit Union Excessive Overdraft fees lawsuit may be surprised to learn that excessive fees at the hands of credit unions is nothing new: to wit, a story with the headline “Don’t Get Fleeced by Overdraft Fees” was published by Forbes in April 2009. That’s almost seven years ago.

And not all fees are overdraft fees either. In the Forbes story (Apr 8, 2009), a paramedic named Justin Possien had taken an overseas contract job and called his credit union, located in Albuquerque, New Mexico, to duly notify them of his pending change of address.

Upon checking his credit union statements over time, he noted a monthly fee for $2 that seemed to appear out of nowhere. When he followed up, he discovered that his change of address did not flow through the system properly and the credit union’s statements and other communications were being returned. So the credit union began charging Possien with what turned out to be a “bad address fee.”

“I called [my credit union] and they promptly refunded the fees,” he told Forbes at the time. “But my main complaint was that they didn’t call or e-mail me about the problem.”

It becomes quickly apparent that lending intuitions, no matter how profitable, love to charge fees - and customers of credit unions are not immune. In the story, Forbes noted a report from the US Government Accountability Office (GAO) that identified a figure of $36 billion that Americans were paying to banks and credit unions in fees associated with checking and savings accounts in 2006.

That was 10 years ago.

What’s more - and this will be of interest to anyone fighting an Excessive Overdraft Fees Lawsuit - overdraft fees were becoming more prevalent even in 2008, when the GAO report for that year identified a rise of 11 percent in the value of the average overdraft fee from 2000 through 2007, after inflation.

Banks and credit unions cite the value of overdraft fees as a small price the consumer pays for overdraft protection that’s less expensive, according to the banks, than the true cost of an overdraft. But not everyone agrees with that position, including Eric Halpern of the Center for Responsible Lending (CRL) in Washington, who told Forbes in 2009 that “[banks and credit unions] are making a lot of money off of [overdraft fees]. It’s a very safe loan for them.”

Of interest to any plaintiff currently embroiled in a Credit Union lawsuit is that the ordering of debits that favor the bank or credit union and result in higher overdraft fees was a problem in 2009 and well before that.

It also doesn’t appear to make much difference regardless of the profitability and wealth of a bank or credit union, and the degree of difficulty a consumer may have in funding an endless parade of fees.

The last word goes to Ed Mierzwinski, who in 2009 was a consumer program director at the US PIRG, the federation of state Public Interest Research Groups.

“There are fees for everything but breathing the air in the bank.”