The bank overdraft fee seems a bit like the financial equivalent of kicking a man when he's down. Having to pay $35 or so because you don't have enough money to cover a check you wrote is like having life hand you lemons -- and then squirt lemon juice in your eye.

Basically, the overdraft and its cousin, the fee for insufficient funds, amount to a further tax on people who are already not doing so well. To make matters worse, in many cases overdraft fees can set off a cascade of unexpected bad checks for people operating on a tight budget. That can turn a $35 problem into something much bigger, according to the Center for Responsible Lending (CRL), which just released a research report entitled "Broken Banking: How Overdraft Fees Harm Consumers and Discourage Responsible Bank Products."

In the report, which examined data from the Consumer Financial Protection Bureau and the Federal Deposit Insurance Corporation, CRL essentially found that overdraft fees were too lucrative for banks to consider giving them up. Even if they want to reform -- and some banks have made changes to certain accounts -- it's hard to walk away from the $14 billion in overdraft fees ($17 billion when you add in charges for insufficient funds) American banks generated last year, according to CRL.

"CRL's analysis confirms that overdraft abuses continue, carrying an enormous annual price tag for consumers as a whole, and with devastating effects on individuals," said Peter Smith, a senior researcher at CRL and the report's co-author in a press release.

Is the number really that high?

In the first three months of 2015 the three biggest banks in the United States -- JPMporgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), and Wells Fargo (NYSE:WFC) -- made $1.1 billion in overdraft fees, CNN Money reported. That projects out to $4.5 billion in 2015, or $20 for every America adult, reported the website.

For the big banks, however, overdraft fees represent only a small percentage of total revenue. Even though the totals add up to astounding numbers, overdraft fees accounted for less than 6% of non-interest revenue at JPMorgan, Bank of America, and Wells Fargo, according to a report by SNL Financial.

Smaller banks, the study found, can make much more than the overall median of 8% non-interest revenue. Woodforest National Bank, which had over 750 branches in 17 states, and First National, which operated just under 300 locations, made more than 40% of their of non-interest revenue from overdraft charges at the time of the study, according to SNL Financial.

"These banks are highly reliant on these charges," says Tyler Hall, a senior bank analyst at SNL Financial. "It just points out that's their business model."

Altogether, in the first three months of 2015, the nearly 600 banks that reported overdraft fees took in $2.5 billion in overdraft fees -- not quite as much as CRL projects, but not so far off as to make its report invalid.

How does this happen?

For consumers with low balances, an unexpected overdraft fee dig a hole that's hard to get out of. CRL explained the process in its press release.

Frequently marketed as a 'customer service', overdraft fees are incurred when a bank account lacks sufficient funds to cover a transaction and the institution pays the transaction anyway. The institution then repays itself the value of the overdraft transactions, and all accompanying fees, from the account holder's next incoming deposit.

Debit card payments and paper check payments alike can result in overage fees, which average $35, but that may only be the start of the problem. "If time lags before the account is replenished, the institution may charge additional 'sustained' overdraft fees, and a bank is also able to charge for multiple overdrafts before the account is replenished," according to the CRL report.

"Financial institutions take advantage of consumers fighting desperately to stay afloat," said Rebecca Borné, report co-author and CRL senior policy counsel. "CFPB should require that overdraft fees be reasonable and proportional to the cost to the institution, much the same way that credit card penalty fees are regulated. Overdraft fees should also be limited to one per month and six per year."

What happens next?

Many of the smaller banks make so much money on overdraft fees that they have little incentive to reform. The larger banks like JPMporgan Chase, Bank of America, and Wells Fargo, however, could in theory spur a change, given that they don't rely on overdraft fees for much of their revenue.

One simple way to reform these practices, according to CRL, would simply be to deny charges when consumers do not have the funds in their account to pay for them. That would stop the chain dead before it has a chance to snowball on the consumer, and it would stop the banks from offering unregulated de facto credit products to consumers who can't afford them.