US banks are imposing stomach-churning and often hidden fees — some with gargantuan, five-digit interest rates — that force as many as 25 million poorer millennials and Gen Xers to go unbanked, according to the latest studies.
“Millennials are a large portion of the group now being pushed out of the system, along with other lower-income people who are economically distressed,” Alex Tabb, chief operating officer of Tabb Group, a financial markets research firm, told The Post. “It just so happens that more millennials are in the lower-income group today.”
And in a report for the podcast “Wall & Broadcast,” Tabb and co-host Dan Simon discover that millennials — a cohort of some 75 million Americans 18 to 34 — are not voluntarily quitting banks in droves just for the lure of high-tech alternatives, as is popularly assumed.
It’s more because of the mafia-style fees banks are charging.
The “Wall & Broadcast” report, which talked to millennials, some unbanked, did not single out any individual banks, but in reviewing the entire sector, the podcast noted:
- The majority of debit card overdraft fees are on transactions of $24 or less.
- The majority of overdrafts are repaid within three days.
- In lending terms, a consumer borrowing $24 for three days and paying the median overdraft fee of $34, effectively carries a 17,000 percent annual percentage rate.
- An unbanked consumer pays as much as 2 percent of the face value to cash a check at a facility such as Western Union in New York.\