Why Banks Want Your Checks to Bounce

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Back in the day, writing bad checks used to be a criminal offense. Now, it’s a profit center. Banks make an eye-popping $17.5 billion a year by encouraging us to overdraw our checking accounts. Banks hold on to deposits and clear checks in a way that ensures the maximum number of bounces, regardless of when the checks were actually cashed. They let us use ATM and debit cards even when there’s no money in our accounts. Then they charge us $34 a pop for the favor. Some banks even charge extra fees for every day an account is in the red, turning overdraft “protection” into a form of loansharking, with interest rates that would make Tony Soprano blush. Except when banks do it, it’s all legal.

Tomorrow, the U.S. House Financial Services Committee will vote on a bill that might change some of this. Among other things, H.R. 946 would prohibit banks from manipulating check-clearing to enhance overdraft fees and require banks to warn customers that their accounts are overdrawn before allowing them to make a purchase with a debit card or make an ATM withdrawal. Seems sensible enough, but expect a major fight over this one, given the money involved. You can read more about overdraft abuses here.

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Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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