A record is available of the last three months of my small business' bank activity showing the exorbitant amount being paid in overdraft charges alone ($1464). Unfortunately, this is a typical quarter in this regard, and I am convinced further research will show that it is typical of many, if not the majority of, similar-sized small businesses without the means to maintain a companion savings account and unable to obtain a line of credit, partially because of this shameful effort by their bank to ensure its profits on the backs of those least able to bear the burden.
Customers who, and businesses that, suffer minor account problems all too often see a mountain of usurious charges pile up. I myself had a personal account at this same bank that has been closed due to this practice. I have been unable to this day to pour money into that financial hole in order to bring it to the zero-balance I need to close the account; a hole dug by this bank's practice of profiting unjustly by charging excessive, often cascading overdraft fees, often by posting a day's charges before applying deposits. It is useless to maintain a register if one cannot count on when one's bank decides it is convenient to process its charges.
Small business is an extremely important part of our economy. For instance:
According to the U.S. Small Business Administration, in June the estimated 25.8 million small businesses in the United States have generated 60 to 80 percent of net new jobs annually over the last decade while employing 50.6 percent of the country's private sector workforce. America's small businesses represent 97 percent of all the exporters of goods and 99.7 percent of all employer firms, and generate a majority of the innovations that come from United States companies.
Also according to the U.S. Small Business Administration, there were 671,800 new businesses and 544,800 closures in with two-thirds of new firms surviving for at least two years and 44 percent surviving for at least four years.
Small firms represent 99.7 percent of all employer firms, employ half of all private sector employees, pay more than 45 percent of total U.S. Private payroll, have generated 60 to 80 percent of net new jobs annually over the last decade, create more than 50 percent of nonfarm private gross domestic product (GDP), supplied more than 23 percent of the total value of federal prime contracts in FY produce 13 to 14 times more patents per employee than large patenting firms. These patents are twice as likely as large firm patents to be among the one percent most cited, are employers of 41 percent of high tech workers (such as scientists, engineers, and computer workers), are 53 percent home-based and 3 percent franchises, made up 97 percent of all identified exporters and produced 28.6 percent of the known export value in FY 2004. (Source: U.S. Bureau of the Census; Advocacy-funded research by Joel Popkin and Company (Research Summary #211); Federal Procurement Data System; Advocacy-funded research by CHI Research, Inc. (Research Summary #225); Bureau of Labor Statistics, Current Population Survey, and the U.S. Department of Commerce, International Trade Administration)
I am appalled by the effort by this bank to ensure its profits through its borderline-low balance customers who must purchase stock, maintain overhead, pay expenses, and also try to eke out a profit directly from the immediate payments of its customers. It is no wonder that the vast majority of new businesses fail within the first year; the burden of this legal bank usury alone is enough to crush even the most promising of small business startups. As you can see, the amount my account is overdrawn is LESS than the accumulated fees of this period! There is something VERY wrong with this system and it must be changed. I am being forced to close my business, which I have had for 10 years, because I cannot cover these ridiculous fees, and therefore have no bank account so cannot purchase stock, etc. I have been informed that my account will go into collections within 30 days if I do not pay all of these fees. I must stress that ALL of the funds contained in the overdraft amount AND MORE are the result of these usurious bank fees ONLY. My bank balance would be POSITIVE if it were not for these fees.
On behalf of myself and my own small business, and so many others nationwide, I contend that:
Overdraft charges are not simply a fee for a service integral to an account, but a system that encourages people to spend money they should not have access to while allowing banks to unfairly profit.
The charges are disproportionate to the amount of money thus borrowed.
The fees charged when customers go into overdrafts bear no relation to the actual costs borne by the banks, and are therefore unfair.
The costs are excessive considering the actual cost of administering these mistakes.
I have requested that NationalCity Bank both refund all of the $1464 they have robbed me of in the last three months alone, and that they discontinue this shameful robbery of America's most vulnerable small businesses and private citizens. NationalCity Bank has refused.
0 comments