Will an Overdraft Balance Impact Your Stimulus Check?
Bank charges add to the problems caused by the pandemic for some Americans. According to the Center for Responsible Lending, major banks charged more than $ 11 billion in overdraft fees from their customers in 2019, with 9 percent of customers paying more than 80 percent of the fees. In the first nine months of 2020, major bank customers paid $ 6 billion in overdraft fees, according to Rebecca Borné, a researcher at the nonprofit advocating better treatment for consumers by financial institutions.
The total amount of fines bank customers paid in 2020 could be lower than last year. However, with such a large portion of the fines paid by such a small subset of customers, the impact of those fees on their finances will likely be much worse this year.
Aside from the temporary truce some banks have struck with their customers in connection with the economic reviews, the banks have not changed their overdraft policies during the pandemic, Ms. Borné said. “The imposition of unreasonably high fees, multiple fees per day, expanded fees, and other practices that manipulate fees to maximize fees – these practices harm those who are struggling the most,” she said.
On Christmas Eve, Andrew Shorts, an artist living in Ogden, Utah, made an effort to pay his electricity bill so he wouldn’t lose electricity and heat. Mr. Shorts, who creates murals and graphic design projects for local businesses, has been suspended from his account with Zions Bank, a Salt Lake City-based lender, as a quick fire of auto-deduction for household bills this fall added $ 150 to his balance in negative Area.
When he called Zion two days before Christmas, a representative told him that he would likely have to pay the bank what he owed and settle the rest. The bank changed its policy after President Trump signed the stimulus plan on Tuesday. A spokesman said Zions would zero all negative balances up to $ 2,000 for 30 days in order for customers to receive their stimulus money.
Mr. Shorts described the $ 600 incentive payment as “the equivalent of a pool noodle while my wife, child, myself, and my now crippled business drown in the open sea.” But he still wants the money. In the meantime, he scraped together just enough to pay his electricity bill.
On the day Congress passed the latest business stimulus laws last week, Misha Roberts, a 26-year-old student at Ohio State University, couldn’t bring herself to log into her online PNC account and look up the balance. She knew it was negative somewhere between $ 1,200 and $ 1,700, thanks to a combination of basic expense bills she couldn’t afford that were automatically deducted from her account and overdraft fees.