It seemed like yesterday that the world economy was rocked by the shady lending practices of American Banks yet here we are again on a verge of creating another subprime crisis.
Consumer Financial Protection Bureau has released a report stating that the U.S. consumers had paid a total of $15billion in fees for bouncing checks(overdrafting) alone. The CFPB is requiring all banks having assets of over $1billion dollars to report all fees arising from overdraft annually and this year the Banks have reported a total of $11.41billion.
Adding to this is the estimates for overdraft charges from smaller Banks and credit unions which add up to $15 billion.
For those who are not familiar what an overdraft fee is, it is a fee charged when a withdrawal exceeds the available balance in your account. The bank may cover the exceeding amount or not depending wether or not you have opted for an overdraft service. The overdraft fee (the exceeding amount + %charges) will be issued to cover the transaction.
It might be fine and dandy until you check the demographic who is screwed by this system. Those who are hit the hardest by this fees are cash strapped Americans who are playing the game of "beat the check". These are the guys living from paycheck to paycheck and may need the funds on payday yet there is no balance yet on their accounts. They might not use credit cards or loans but they are screwed nonetheless.
Most of the Banks have overdraft service as default so you might want to check your bank with that.
Next news: American credit card holders are $1 trillion in debt
Ever since that recession sensation last 2008, it seems that the Banks are back at the subprime game. Seems that Btc and Eth are not alone at the All Time High with the $1trillion debt from credit card holders. Making it the highest in American history.
Here is a quote from marketwatch.com:
They now collectively have the most outstanding revolving debt — often summarized as credit card debt — in U.S. history, according to a report Monday released by the Federal Reserve. Americans had $1.021 trillion in outstanding revolving credit in June 2017. This beats the previous record in April 2008, when consumers had a collective $1.02 trillion in outstanding credit revolving credit.
Credit card companies must be making some serious stacks right now and you might want to invest in these institutions if cryptos isn't your drift.
We have seen this trend leading up to the 2008 economic collapse and might be a symptom of worse things to come. This might even lead up to the subprime mortgage crisis where Banks struggle to keep profits afloat by lending to people with no capacity to pay.