Every U.S. Citizen pays $126 per year in overdraft fees. Following are a sketch of how I’ve come to this conclusion and its repercussions for how we feel as citizens and who, indeed, is providing the governance in this country.

U.S. banks will gather record of $38.5 billion in overdraft fees [endnote 24]

Population of the United States: 304,059,724

This amounts to $126 per person in the United States per year in overdraft fees.

Subrtract the population that makes $100,000 or more (15.7 percent of U.S. households in 2005):

That amounts to $145 per person in overdraft fees per year for someone middle-class or below.

That’s an average of 4.1 overdrafts per person a year. Most of us with decent jobs [endnote 25] are not making 4 overdrafts per year—so who is?

(Here’s one answer: “Overdraft fees affect student finances”

Here’s another: “FDIC: Bank overdraft fees hit young, low-income customers”

These are figures entirely for debit cards fees. They don’t include other banking fees or fees collected for credit card transactions.

They are fees for purchases ranging from a single bottle of coke to a few books to a night at a restaurant. One doesn’t get a $35 for going over in buying a flat-screen TV. If you get it for spending $1,000 at Saks, I don’t think it’s that much of a biggee.

An overdraft “fee” is essentially a penalty—banks never tell you exactly where these fees are going, and what harm your overdrafts are actually doing to the bank, so they behave more like parking tickets than service charges. That is, overdraft fees are more like penalties from the government than from a service provider.

Debit cards are regarded more like credit cards than as easy access to funds you deposited in a bank. That is, they are treated by the banks as money that has been leant to you, and that you have not paid back in a timely fashion. But whereas you are given several weeks to pay back your credit card, you are charged immediately for overdrafts, with no basis to contest a “fee.”

This effectively amounts to the criminalization of every citizen in the United States who uses a debit card. This is basically everyone.

Debit cards, along with online banking, are interfaces. They are ways to manipulate data (behind which most of think is something “concrete”—that is, money).

All of the major banks are moving in synch in terms of the amount of overcharge fees they charge ($35), and even in terms of when they make policy changes (three of the major banks announced changed policies in in September, 2009).

This effectively amounts to a monopoly, and should be subject to the anti-monopoly laws that Microsoft was subjected to regarding their operating system [endnote 26].

But bank monopoly is worse since, after all, Apple was able to provide significant competition to Microsoft during their more dominant years, and independent programmers were able to develop Linux which could have stepped in if things got really bad. With changing technology (such as the rise of Google and increased reliance on the web and smart phones), Windows was (or will be) destined to be an option among many anyway.

Under present conditions, with involuntary reliance on debit cards, no competition can arise against the four major banks. I can open a bank, but I can’t open an ATM (an extension of the interface) on every other street corner.

The amount of money that is circulating to the four major banks through penalties dwarfs the amount of money attached to causes that drive people to referendums, protests and renegade political campaigns [endnote 27]. This implicates politics itself as largely ignoring the major foci of the circulation of money.

People with a desire to control where their tax money is spent are largely arguing over peanuts as far more of their money is circulating in ways that do them no social services at all, not to mention the basic function of easing money transactions.

This post is a section of Bank of America Online Banking: A Critical Evaluation. This essay is also available as a book which can be downloaded for free at Lulu (where an inexpensive, not-priced-for-profit print edition can also be purchased) and at Scribd. The table of contents for the blog version of this essay can be seen in its entirety here.