That works out to significantly more than 150 overdrafts per year, 13 overdrafts per month and about three overdrafts per week, every single week, over seven years.
Those are astonishing numbers, and data from the Consumer Financial Protection Bureau suggests that chronic overdrafters like the Hunters are not common. But many American households repeatedly pay a price for overdrawing their accounts.
Last August, the CFPB released a report on frequent overdrafters that includes the subset of “very frequent” overdrafters, who incur more than 20 overdraft or non-sufficient fund (NSF) notices in a given year.
Although it is worth noting that the Hunters were incurring overdraft and NSF notices at a rate nearly eight times the threshold for being considered a “very frequent” overdrafter, the CFPB’s report nonetheless sheds light on the broader universe of frequent overdrafters of which the Hunters are a part, and it contains surprising findings about who these account holders are and how their finances tend to look.
For starters, overdrafts and NSF notices are relatively uncommon — two-thirds of the consumer accounts the CFPB studied in 2011 and 2012 incurred no overdrafts or NSF notices in a given year. At the other end of the scale, overdrafters with more than 20 annual overdraft/NSF notices accounted for fewer than 5 percent of all accounts but incurred more than 63 percent of all overdraft and NSF fees.
The very frequent overdrafters have a number of things in common, according to the report. They typically have about $276 in their accounts on any given day, much less than the median balance of $1,585 among account-holders with no annual overdrafts. They do a lot of debit card transactions in a typical month — a median of 29.1, compared with just 4.6 among the zero-overdraft group. They’re less likely to have active credit cards, and if they do, they’re more likely to be maxed out — the median amount of credit available to very frequent overdrafters is $225, compared with more than $14,000 for the zero-overdraft group.
Interestingly, the typical frequent overdrafter actually has more money going into his or her account ($2,554 a month) than any other group, including occasional overdrafters ($1,816 a month) and never-overdrafters ($2,093). That suggests that many people facing overdraft difficulties aren’t necessarily poor but that they’re unable to keep their spending in line with their income.
Although frequent overdrafters live in neighborhoods with slightly lower median incomes ($54,265) than, say, never overdrafters ($59,832), those differences aren’t as large as you might expect.
According to the Justice Department indictment and personal financial disclosure forms, many of these financial characteristics apply to the Hunters. “Their credit cards were frequently charged to the credit limit, often with five-figure balances,” according to the indictment.
The indictment also describes numerous instances where the balances in the Hunters' bank accounts hovered close to zero. At one point in 2010, for instance, Duncan Hunter is alleged to have used $41.75 in campaign money to make purchases at a 7-Eleven store while he had a balance of 6 cents in his account. During a January 2010 vacation to Nevada, the Hunters incurred six insufficient-funds fees totaling $198. Hunter’s personal bank account balance was $15.02 at the time. The Hunters ultimately spent more than $1,000 in campaign money to pay for that trip, according to the indictment.
The Hunters maintained that precarious financial position for years, the indictment alleges, despite pulling in an annual congressional salary of $174,000. Hunter is in fact one of the poorest members of Congress, with an estimated net worth of negative-$387,000, according to an analysis of his 2015 financial disclosure forms by the Center for Responsive Politics.
The difference between the Hunters and the typical frequent overdrafter is that the Hunters had access to Duncan Hunter’s campaign account, which the indictment alleges the couple used as a slush fund for personal expenses for many years. That evidently allowed the couple to maintain an outward semblance of financial stability despite incurring tens of thousands of dollars in bank penalties — penalties that could cripple a typical family.
On May 1, 2011, Hunter warned during debt limit negotiations that “America can no longer afford to borrow and spend its way to prosperity” and that “Washington doesn’t have a revenue problem. It has a spending problem. "
Later that summer, according to the federal indictment, the Hunters incurred so many insufficient-funds fees during a personal vacation to Las Vegas that Duncan Hunter’s parents had to deposit money into their account. The Hunters ultimately paid for that vacation with $2,448.27 in campaign money.