06/10/2012 - The federal Consumer Financial Protection Bureau needs to bring transparency to debit card banking. The Federal Reserve made a good regulatory start in 2010, when it required banks to get account holders’ consent before enrolling them in overdraft “protection” programs that could cost them $35 each time they used a debit card and overdrew their account — the cards provide no warning of insufficient funds. Customers who did not opt in would have their purchases declined.
The regulations were sound, but consumers immediately complained that some banks failed to explain the opt-in policy or even pressured customers into taking it by saying that their debit cards might no longer work.
A new study of the nations’ 12 largest banks and 12 largest credit unions by the Pew Charitable Trusts safe checking project shows that consumers are still being intentionally kept in the dark. Disclosure forms containing fee information now run a median length of 69 pages for banks and 31 pages for credit unions. Both banks and credit unions use many different names to describe overdraft fees, making comparison shopping by consumers nearly impossible.
Read the full editorial, More Debit Card Follies and Abuses, on the New York Times' website.