Unfair bank practices threaten to shred the safety net of Social Security for older Americans
Wednesday, June 25th, 2008
By Staff
Americans 55 and over pay $4.5 billion in fees annually for overdraft loans they haven't asked for and typically don't want, a new study by the Center for Responsible Lending finds. Of that, nearly $1 billion is stripped from people heavily dependent on Social Security income.
The new report "Shredded Security: Overdraft practices drain fees from older Americans ," shows that overdrafts triggered by debit card use hit people at or approaching retirement age hard even though they use plastic less than younger debt-card holders. The cost – $1.65 in fees for every $1 advanced – reinforces CRL's previous research, which found that overdraft fees are disproportionate to the amount advanced to cover a purchase: Unauthorized overdrafts cost Americans $17.5 billion in fees for $15.8 billion advanced.
The findings come as the Federal Reserve and federal policymakers are considering changes to rules governing overdraft loans.
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