(Bloomberg) -- Perhaps the most despised bank fee amongconsumers is the overdraft fee, an ugly $30 (or so) insult toyour wallet.

Many consumers have been hit with it at one time or another,usually when it’s the absolute last thing they need.

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The depth of consumer disgust for such a high fee is, alas,equally matched by the abiding love banks, thrifts, and creditunions have for the billions of dollars in annual revenue theyprovide.

Overdraft services began decades ago as a simple service forcustomers without calculators: If you didn’t have enough money tocover a check, your bank saved you from bouncing it.

But we’re talking banks, here, so nothing is for free.

A new report from the Consumer Financial ProtectionBureau shows just how much of a bite overdraft fees can takeout of some consumers, and provides new prototype disclosure formsit hopes banks and credit unions will adopt.

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The CFPB examined overdraft fees on debit cards and ATMwithdrawals for people who frequently find themselves overdrawn ontheir checking accounts.

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Among those who paid 10 overdraft or non-sufficient fund (NSF)fees a year, those who opted into a bank’s overdraft servicepaid as much as $450 more in fees than those who had similarbehavior but who didn’t opt in to overdraftcoverage.

Essentially, frequent overdrafters paid $450 annually for aseries of what you could call extremely short-term, extremelysmall loans.

Those consumers made up 9 million, or 22.5 percent, of the 40million accounts the CFPB studied at a small number of largebanks, and they paid 79 percent of the banks’ total overdraft andNSF fees. A 2014 Pew Charitable Trusts study found that in2013 “10 percent of Americans paid at least one overdraft penalty,and another 5 percent paid an overdraft transfer fee.”

What makes this all particularly perverse is that the CFPBestimated in previous studies that most debit card transactionsleading to overdrafts are $24 or less.

That small overdraft, however, can lead to a cascade of big feesif the consumer doesn’t catch it, and thus continues to usethe card as usual or doesn’t pause automaticpayments for cable, power, and the gym.

Senator Cory Booker of New Jersey, a Democrat, has inquired ofbanks for information on their overdraft programs, and severalclass actions against credit unions, which depend heavily on thesesfees, have been filed in recent years.

Nevertheless, it’s become a bit easier to avoid overdraft feesin recent years.

A regulatory change that became effective in 2010requires that, for banks to charge you an overdraft fee on adebit card purchase or ATM withdrawal, you first haveto opt-in to its overdraft service.

If a consumer doesn’t opt in to the service, which costs nothinguntil it kicks into action, their transaction can simply be refusedbecause they don’t have enough money in the account.

The regulation doesn’t apply to checks or scheduled onlinebill-payments, though, which is why one overdraft can cascadeinto a string of fees if automatic payments aren’t halted.

Fintech companies, meanwhile, are popping up with mobile phonemoney management apps to help millennials avoid overdraft fees.

One such company is named Dave—which has Dallas Mavericksowner Mark Cuban as lead investor—and tracks, analyzes, andpredicts users’ balances and lets them borrow up to $75,interest-free, until the next payday to prevent an overdraftfee.

The company sees helping with overdrafts as a way into a biggerbanking relationship with its users, who tend to be between 18 and34.

A U.K. startup called Chip is a chatbotalso focused on helping British millennial users avoidoverdraft charges through its savings algorithm. The companyhas plans for a feature called “Smart Credit” thatwill automatically provide a small loan (not for free butless than an overdraft would cost) when it sees a customer isabout to go into overdraft.

Many consumers agree to overdraft services without beingentirely clear what they’re signing up for—or just forgetting theyagreed to it. The 2014 Pew report found that 52 percent ofpeople who overdrew their account and got a fee didn’t recallopting into the coverage.

The benefit, of course, is that the bill your paying gets paidor the purchase you’re making rings through. The cost, of course,is the fee.

Overdraft fees on checking accounts have risen since therecession and are the leading fee category in all non-interestincome, said Michael Moebs of Moebs Services Inc., an economicresearch firm.

He thinks fees could produce $40 billion in annual revenueacross banks, thrifts, and credit unions by 2020. In the firstquarter of 2017, bank and credit union revenue from overdraft fees,including those on bounced checks, was $8.4 billion, whichtranslates into $33.6 billion on an annual basis, he said.

Pew has urged regulators to make changes including enabling“banks and credit unions to offer affordable small-dollar loans inplace of expensive overdraft penalty programs” and to “makeoverdraft penalty fees reasonable and proportional either to thefinancial institution’s costs in providing the overdraft loan or tothe overdraft amount.”

Virginia O’Neill, senior vice president of the American BankersAssociation, said in a statement that the lobbying group will work"with the bureau to test the proposed new disclosures to make surethey improve consumer understanding.”

Don’t expect much regulatory action out of the CFPB on theoverdraft front soon, though.

In a prepared statement introducing the new report,CFPB director Richard Cordray said that, “We are notproposing any regulatory amendments at this time, though we areconsidering new overdraft regulations, and currently we are in the‘pre-rule stage’ with no timing stated for when a rule may beproposed.”

If Cordray is to lead the charge, he has about a year—histerm expires in July, 2018, though at leastone adviser to President Donald Trump hassuggested an earlier departure.

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