Wells Fargo's Shady Overdraft Fee Practice Is Legal, Court Rules

Wells Fargo turned overdraft fees into a billion-dollar hustle.

Beginning in April 2001, when you made a string of purchases on your debit card, the bank would process the most expensive charges first in order to maximize the number of overdraft fees. Between 2005 and 2007, Wells Fargo made $1.4 billion from this.

The widely used banking practice was so shady that the Obama administration implemented new rules requiring banks to ask customers' permission before providing them with automatic overdraft protection. And some of Wells Fargo's California customers filed suit.

But while the overdraft fee hustle might be shady, it is not illegal, the Ninth U.S. Circuit Court of Appeals ruled on Wednesday.

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