Overdraft fees have been getting tons of attention lately, including Congressional scrutiny -- and some banks, like JPMorgan Chase (JPM) and Bank of America (BAC) are cutting back. That's great.

Still, The American Banking Association defends the practice this way: “Clearly, consumers who pay overdraft fees are the minority, and that number is shrinking. More importantly, most consumers want banks to pay their overdrafts so they can avoid the inconvenience, embarrassment and potential costs of having a payment or transaction rejected,” said Nessa Feddis, ABA senior federal counsel in a recent statement.

But a new report underscores just how much financial institutions are profiting from the fees and how much they hurt average Americans.

Center for Responsible Lending: Banks and credit unions collected nearly $24 billion in overdraft fees last year, an increase of 35 percent from just two years earlier, a new study by the Center for Responsible Lending shows.

The explosion in overdraft charges has drained the wallet of as many as 51 million Americans whose accounts become overdrawn annually. It is particularly harmful to financially vulnerable families already hit hard by the recession.

Highlights of the report include:

Over 50 million Americans overdrew their checking account at least once over a 12 month period, with 27 million accountholders incurring five or more overdraft or non-sufficient funds (NSF) fees.

Banks and credit unions collected nearly $24 billion in overdraft fees in 2008.

Overdraft fee income for banks and credit unions rose 35 percent from 2006 to 2008.

"Banks and credit unions have become so sophisticated in driving up overdrafts that Americans now pay more in overdraft fees every year than they do for books, cereal, or fresh vegetables," said CRL senior researcher Leslie Parrish. "These billions of dollars drained from consumers each year represent lost opportunities for families to save for a rainy day or buy necessary goods and services that could help spark the economy."

Two illustrative CRL charts:

And this: