Bank Overdraft Fees Creeping up Again, Consumer Monitors Say

Publication: The Philadelphia Inquirer

Author: Jeff Gelles


06/09/2012 - Even as the new Consumer Financial Protection Bureau weighs whether to address bank overdraft fees that cost U.S. consumers nearly $30 billion last year, some of those fees continue to inch up, according to new reports by the Pew Charitable Trusts and the Consumer Federation of America.

The typical overdraft fee at the nation's largest banks has remained about $35 for the last two years, the reports said. But Pew's Safe Checking Project said Thursday that median fees for an extended overdraft — one not quickly covered by new deposits — rose 32 percent from October 2010 to October 2011. And Pew said more accounts were subject to the extended-overdraft fees, which consumer advocates say blur the line between overdrafts and short-term, high-cost "payday loans."

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Pew, which has urged banks to simplify disclosure of fees and lower-cost alternatives to overdrafts, said some banks' policies continue to "put consumers at financial risk and potentially expose them to high and unexpected costs for little benefit."

Officials at the American Bankers Association disputed the assertion by Pew and Fox that consumers face unexpected or unreasonable costs now that opting in is required.

Read the full article, Bank Overdraft Fees Creeping up Again, Consumer Monitors Say, on the Philadelphia Inquirer's website.

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