Market - - Feb 23,2017
Wells Fargo, JPMorgan and Bank of America earned about $1.1 billion as ATM fees, $2.3 billion as maintenance fees and $5.4 billion as overdraft fees in 2016.
According to a report, America's three biggest banks Bank of America, JP Morgan Chase, and Wells Fargo earned about $8.8 billion in 2016 from ATM, maintenance and overdraft fees.
An ATM fee is levied by banks for using an out of network ATM. The big three banks in the US earned about $1.1 billion as ATM fees. In The US, the average fee charged for using an out of network ATM is $4.57, which has been growing for the past eleven years now.
JP Morgan’s revenue from ATM fees jumped 22 percent last year. It should be noted that JPMorgan raised ATM fees by half a dollar at the end of 2015.
Maintenance fees are charged monthly just to keep an account active. Some banks also charge a fee if account balance falls below a particular level. The big three banks earned a revenue of $2.3 billion from maintenance fees.
Another fee, Overdraft fee, occurs when a customer's bank balance falls below $0 and still they want to take out money from an ATM or use a debit card for shopping. In this case, the bank is essentially giving a loan to customers. Keeping the risk in mind, many banks charge about $35 every time this happens. The big three banks earned about $5.4 billion from the overdraft fee.
A disturbing fact is that 8 percent of customers, mostly young and poor, pay 75 percent of all overdraft fees. These customers are unaware of the banking norms and they are over drafting 10 or more times a year.
These unfair means to generate revenue have a disproportionate impact on low-income families.