Bank of America Accused of Loan-Sharking with Steep Overdraft Charges
The infamous $40 latte rankles critics of bank overdraft charges, but the fees don’t always end with the initial $35 charge. Bank of America charges customers another $35 if they don’t deposit money in their accounts five days after draining their balances below zero.
A proposed class action suit accuses Bank of America of loan-sharking, saying the charges are essentially short-term loans with interest rates that can top 800 percent a year. The charges are “egregiously high, usurious and illegal,” according to the federal suit.
A spokeswoman for Bank of America, the largest bank in Florida, declined to comment. One banking expert called the case a long shot because usury laws typically apply to loans but not checking accounts.