This article is part of the Overdrafting in the United States report
America’s current political climate is fraught, tense and deeply partisan. Arguments flair up daily over events national and international, each side staunch in its take. But when it comes to personal finance, can Americans agree? When it comes to, say, national overdraft habits, do Americans feel Washington has their backs?
OverdraftApps.com surveyed 1,009 people ages 18 to 71 from 46 of the United States (excluding Wyoming, Vermont, Alaska and Hawaii) about their overdraft habits (that is, spending more than they actually have in their checking accounts and subsequently paying fees) to answer exactly these questions. Nearly half of respondents (49%) bank with a large corporate bank such as Bank of America or CitiBank, approximately 22% use a credit union, 22% use a local bank and 7% use an online-only bank like Simple.
Among our findings, we discovered both that overdrafts were quite common, and that there was a great deal of confusion around how and why they happen. As many as 46% of Americans said they had overdrafted at least once in the past year, 13% of Americans had overdrafted three to nine times in the past year and 5% had overdrafted more than 10 times in the past year. The study also found that approximately 42% of respondents said they had overdrafted but didn’t realize it until later.
Among the various groups we surveyed, we looked at those of varying income brackets. Instances of overdraft once or twice in the past year were surprisingly similar in all of them. Within those making less than $25,000, 23% overdrafted once or twice in the past year. Within those making $25,000 to $50,000, 32% overdrafted. Within those making $50,000 to $75,000, 30% overdrafted. Within those making $75,000 to $100,000, 23% overdrafted and within those making more than $100,000, 27% overdrafted.
With Americans clearly struggling to keep their spending and budgets in check, we asked consumers if they ever felt like “the system” — whether political, in D.C., or financial, on Wall Street — is taking advantage of them when it comes to financial products (like a checking account). Sadly, the majority of respondents said yes: more than half (51%) said they’ve often felt this way and 37% said they have felt this way a few times. Only 12% reported rarely feeling this way all.
And when it comes to the current US administration, specifically, Americans have little faith. When asked if they trust the current administration to help lower their bank fees, only 22% said they believe that, yes, the administration can help make a difference. Conversely, 78% of respondents said they do not trust the administration to help with this particular problem. When asked if they trust President Trump, specifically, to help decrease high bank fees, only 17% said they believe he will, while 83% said no, they don’t believe it’s on his agenda.
And the majority seems to be right. On January 30, 2017, just days after taking office, President Trump issued an executive order reducing government regulation on small and large business (such as banks), stating, “it is essential to manage the costs associated with the government imposition of private expenditures required to comply with Federal regulations. Toward that end, it is important that for every one new regulation issued, at least two prior regulations be identified for elimination.” That is, President Trump is rolling back regulations on businesses. The less regulations businesses like banks have to contend with, the more freedom they have to set their own rules and agendas for how to interact with customers, and decide for themselves how and what kind of fees to apply to their services. In May of 2018 President Trump also signed a bill rolling back Dodd-Frank regulations on all but the largest banks, and has repealed auto-lending guidance from the Consumer Financial Protection Bureau intended to protect minorities.
Our study also surveyed members of the LGBTQ community, 11% of our respondents identifying as such. Unsurprisingly, those in the community were more likely to feel taken advantage of by the system than the general population. When asked if they felt taken advantage of, 61% of LGBTQ respondents said that they’ve often felt this way (compared to 51% of those in the general population).
Additionally, 90% of LGBTQ respondents do not trust the current administration to help lower bank fees, compared to 76% of those not in the community. And a whopping 94% of LGBTQ respondents do not believe President Trump, specifically, will help decrease bank fees, compared to 81% of those not in the LGBTQ community.
Despite their concerns, many of those surveyed still tried to rectify their financial situations by calling their financial institutions to get these fees reversed. More than half of respondents, 58%, reported having done so, 26% saying they’d never tried because they didn’t think it would work and another 16% saying they’d never tried but probably should.