An article in the Feb. 19th issue of Credit Union Times on overdraft privileges was just one of the recent pieces that's been published on overdraft programs, and it made me realize the importance of putting in writing some facts about overdraft programs not discussed. Overdraft programs have been receiving a lot of attention lately, specifically in a New York Times article on Jan. 22, 2003, "Banks Encourage Overdrafts, Seeking Profit." The institutions discussed in the article say they're not preying on the weak by charging high fees for covering overdrafts. But consumer advocates disagree and have expanded the blame to include consultants who advise banks and credit unions to institute these programs. Since my company falls in to the category of `consultant,' I'd like to share my views on the current controversy.I agree with the consumer groups. They are right, and let's face up to it. Too many banks, savings institutions and credit unions aren't taking the high ground. What's sad to the majority of us in financial services is that the programs described in the New York Times article drags us all down. Banks and credit unions have been offering honorable overdraft services for years, providing their busy accountholders with a meaningful benefit – for a fee – without taking advantage of them. It's a fact that less than 13% of consumers balance their checking accounts on a regular basis – a clear indication of busy times. Today's sharedraft account is central to the financial life of the average American, allowing for a range of payment options: checks, automatic bill payment, debit cards, ATMs. An honorable overdraft service, the kind consumer-oriented financial institutions know, serves depositors, it doesn't take advantage of them. An honorable overdraft service is a deposit-based function. When an overdraft occurs, the institution notifies the accountholder of the situation and requires that the account be in balance within 24-48 hours. It's not a loan and it doesn't automatically and secretly include all customers/members. It's a service provided to qualified, ordinary, busy depositors, and it allows them to use the service or opt out. An honorable overdraft service charges modest fees to cover overdrafts. In our work in collecting pricing data for the Fed, we know that the average fee for an NSF or overdraft is $20.00 for credit unions and $22.88 for banks. That should be at the high end of the range for overdrafts for any institution. Some financial institutions are bilking consumers with excessive fees as high as $35. In addition, these overdraft protection programs are characterized by low overdraft limits (from $100 to $500) and everyone-is-included participation. Some have even stooped so low as to target lower income groups, enticing them with "free checking" and then automatically enrolling them in an overdraft program. These consumers are not given the opportunity to decline. And the lack of clear communication to them is appalling. Clearly, this is wrong. Depository institutions should not be able to take advantage of consumers by charging excessive fees. At the very least, consumers should have the benefit of clear communication, and the choice of opting out. We're hearing an outcry from consumer groups, and we should listen to them. We can wait for their lobbying groups to influence Congress, we can wait for the Fed to impose mandates. Or we can take the responsibility and do the right thing ourselves. Why wait? G. Michael Moebs Economist, Chairman Moebs $ervices Inc. Lake Bluff, Ill.