Overdraft fees charge $35 on a $4 coffee because banks reorder transactions largest-first

Banks frequently reorder daily debit transactions from largest to smallest rather than chronologically, which maximizes the number of transactions that trigger overdraft fees. So what? A person who buys a $4 coffee, a $7 lunch, and then a $500 rent payment in that order gets the $500 processed first, draining the account so the two small purchases each trigger a $35 overdraft fee. So what? That means a person who had $510 in their account and spent $511 total now owes $70 in fees on top of the $1 they were actually short. So what? This disproportionately hits low-income people living paycheck to paycheck who cannot maintain large buffer balances, creating a poverty trap where fees make it harder to ever build a cushion. So what? These individuals then fall into cycles of repeated overdrafts because the fees themselves reduce their next paycheck's effective value, leading to chronic account instability. So what? They eventually abandon traditional banking entirely and turn to predatory check-cashing services and payday lenders, which are even more expensive. The problem persists structurally because overdraft fees generate approximately $8 billion annually for U.S. banks, creating a massive revenue incentive to preserve the practice. Regulatory attempts like the CFPB's proposed rules face intense lobbying. Banks frame overdraft as a 'service' rather than a fee, and most customers do not realize transaction reordering is happening because it is buried in account agreements nobody reads.