Monthly Archives: January 2022

Overdraft Fees

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I recently heard The Indicator from Planet Money’s Overdraft Fees podcast episode. Two statistics immediately jumped out at me.
1) Banks made $15.5 BILLION dollars on the fees in 2019 (CFPB Link).
2) Less than 10% of the banking population generated approximately 80% of the fees.

HOLY CRAP… #2 surprises me the most yet at the same time doesn’t really surprise me at all. Given the income wealth inequality… many people on the lower end of the income distribution are literally cash strapped and living paycheck to paycheck. I’ve heard instances when banks charge a set fee for every transaction that’s overdrawn. That’s fucking ridiculous. Why doesn’t the consumer opt out of this predatory behaviour? Apparently the consumer was under the impression that they HAD to sign up for overdraft fees without realizing that they can opt out. EGADS!!!

I will say that early in my career, I also got hit with overdraft fees. I learned two valuable lessons at that time. First, the ACH transfer delay is a fucking joke since the ACH transfers now could be same day if the banks wanted it so. Also, why use ACH when payments can be electronically delivered immediately through other applications like the bank supported Zelle, Venmo, and Paypal? Second, pending transactions by the bank doesn’t work in your favor and acts as if money is not there. I got hit a few times mainly because I didn’t plan ahead to transfer the money I needed.

I wonder though… if this issue masks a much larger issue of the lack of financial literacy in the US population.

Trusted Traveler Blues….

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Trusted Traveler is one those US Government programs that tries to make things efficient at airports and border crossings. The idea is that the government will pre-screen US citizen / travelers first and if approved, the traveler is granted a few benefits at these entry points. Two of the notable benefits are Global Entry and TSA PreCheck. Global Entry allows an approved traveler to quickly go through customs after returning from travel abroad. TSA PreCheck allows an approved traveler to go through expedited screening process through the airport security. Generally, this means there’s a dedicated line for the traveler to walk through and also includes a nice benefit of not having to take off shoes.

I recently renewed my application. And wow…. getting an interview is difficult. I couldn’t find any ZOOM based interview time slots (preferred) but even in-person time slots were difficult to come by. Looking through at the various locations that offer in-person interviews, the availability varies from city to city irrespective of the region. The West coast was as busy as the East coast and was as busy as the South. Fortunately, I found a time 9 months later at the local office. I could also travel to another airport for earlier interviews but it didn’t seem to make any sense doing that since I’d have to take time off and spend money on airplane tickets. I could better spend the money on travel to where I want.