This may be the most shocking thing about Duncan Hunter’s indictment
A federal jury on Tuesday indicted Congressman Duncan Hunter, a Republican from California, and his wife Margaret on charges that they allegedly used more than $250,000 of campaign funds to pay for personal expenses including family vacations, school tuition and theater tickets. They also filed false campaign records, the Justice Department said.
To conceal their spending, the Justice Department alleges they claimed in Federal Election Commission findings that their purchases were “campaign travel,” “dinner with volunteers/contributors,” “toy drives,” “teacher/parent and supporter events,” “gift cards” for charitable donations, and “gift basket items.”
Despite allegedly spending over $250,000, the Hunters also managed to overdraw their bank accounts more than 1,100 times in a seven-year period.
One particularly shocking allegation states: “Family dental bills paid with campaign funds were characterized as a charitable contribution to ‘Smiles for Life.’” Other hair-raising allegations: $462.46 for 30 shots of tequila, $1,500 on video games, $399 on a Zipline ride, $14,000 on a trip to Italy and even airfare for his child’s bunny.
Hunter said funds from his campaign had indeed been used improperly, but that he was not responsible for that. “Campaign money was misspent out of my campaign — I did not misspend it,” he said, according to The Wall Street Journal.
But although they allegedly had more than $250,000 in campaign funds at their disposal, during the course of seven years, the Hunters overdrew their bank accounts more than 1,100 times. As a result, they paid almost $38,000 in overdraft and other banking fees. While their alleged creativity with campaign money may strike most people as highly unusual, Hunter may be no different from his constituents, especially those who have low incomes, or are particularly young.
Consumers are spending more on overdraft fees than they have in years. Americans paid a whopping $34.3 billion in overdraft fees in 2017 — the most they’ve paid since 2009, during the end of the Great Recession, according to a report from Moebs Services, a research firm that focuses on financial institutions.
Part of the reason why: Those fees are higher than ever. The average overdraft fee at a bank is now $30, up 50% from $20 in 2000, Moebs found. Credit unions, typically lauded for their consumer-friendly practices and prices, aren’t far behind. The average overdraft fee at a credit union almost doubled over that period, reaching $29, up from $15 in 2000. (To find those numbers, Moebs analyzed prices at more than 3,800 banks, credit unions and other financial institutions.)
About one fifth of account holders pay more than 90% of all overdraft fees that are triggered by debit cards, checks and electronic account transfers.
More interesting, perhaps: A small group of consumers seem to be responsible for the vast majority of overdrafts overall. About one fifth of account holders pay more than 90% of all overdraft fees that are triggered by debit cards, checks and electronic account transfers, according to Pew Charitable Trusts, a nonprofit based in Philadelphia. Often, those people are having financial problems. Three in four over-drafters say they had trouble paying monthly bills in the last year, Pew found.
Many consumers don’t know they can opt out of the ability to overdraw their accounts. In fact, banks are required by law to make the ability to overdraw an “opt-in” option when consumers sign up for their account, rather than making it a default option. But those agreements can be unclear. Half of consumers whose accounts have gone into overdraft don’t remember ever signing an agreement, Pew has found.
Still, the allegations that the Hunters went into overdraft 1,100 times are still extreme by normal standards. Just one in 10 consumers who are between the ages of 18 and 25 overdraws their account more than 10 times in one year, according to the Consumer Financial Protection Bureau. And as people get older, they generally become more fiscally responsible. Just 2.8% of those ages 62 and over overdraw that much, the CFPB data found.
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Maria LaMagna covers personal finance for MarketWatch in New York.
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