And it’s worth pointing out that these fees are really exorbitantly priced short-term loans, with a median APR of 4,500 percent. Berlau would have you think it’s okay (moral, even!) to have imprudent poor people—less financially literate, naturaly—subsidize checking accounts for people not living on the edge. The average person hit by overdrafts paid $1,374 a year for them, according to one study.

Arguments are better when they’re above board, too—but then we wouldn’t have as many of them. Berlau calls for legislation overturning the “overdraft controls” that have resulted in the decline of free checking. Problem is, anybody who wants to have overdrafts on their account can still get them. Banks aren’t prohibited from charging them. They’re prohibited from automatically enrolling you in overdraft “protection” and not letting you opt out of it.

Berlau’s whole piece, which you can be sure the Journal endorses, is predicated on you not understanding that.

Look, banks have to make money. No one’s saying they don’t. But they should make their bucks above board, not with predatory tactics. Markets work better—they’re more, um, competitive—when costs aren’t hidden.


Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.