04/27/2011 - Consumers continue to spend billions on overdraft fees, despite a Federal Reserve regulation that requires banks to obtain customers' permission before signing them up for overdraft-protection programs, consumer advocates say.
Consumers will spend an estimated $38.5 billion in overdraft penalty fees in 2011, up from $18.6 billion in 2000, according to a study out today by the Pew Health Group, the consumer-product safety arm of the Pew Charitable Trusts.
Part of the problem is that most banks fail to adequately disclose the cost of different overdraft options, Pew said. For example, the median overdraft-protection fee is $35, vs. $10 to transfer funds from a customer's savings account to cover the overdraft, the study said.
Under a Federal Reserve rule adopted last year, banks are required to obtain customers' permission before charging them fees to cover debit card or ATM overdrafts.
Read the full article Bank Overdraft Fees Pile Up Despite Fed Regulation on USA Today's Web site.