Reference link: http://finance.yahoo.com/loans/article/107489/old-banks-new-lending-tricks.html?mod=loans-personl_smallbiz

CDS-Linked Corporate Credit Lines. Some of Wall Street’s latest innovations give reason for pause. Consider a trend in business loans. Lenders typically tie corporate credit lines to short-term interest rates. But now Citi, JPMorgan Chase, and BofA, among others, are linking credit lines both to short-term rates and credit default swaps (CDSs), the volatile and complicated derivatives that are supposed to act as “insurance” by paying off the owners if a company defaults on its debt. JPMorgan, BofA, and Citi declined to comment.

U.S. banks to make $38 billion from overdraft fees. (Reuters) – Banks in the United States are poised to make $38.5 billion in customer overdraft fees this year, the Financial Times said, citing research by Moebs Services. A large portion of the revenue is likely to come from the most financially stretched consumers, according to the paper. It said the research showed that many banks have increased charges on overdrafts and credit cards in order to boost profits. “Banks are returning to a fee-driven model and overdraft fees are the mother lode,” Mike Moebs, the company’s founder was quoted by the paper as saying. Overdraft fees accounted for more than 75 percent of service fees charged on customer deposits, the paper cited Moebs as saying.