The Hill.com 02/22/12 Peter Schroeder
“Consumer Bureau Targets Overdraft Fees”
The Consumer Financial Protection Bureau (CFPB) is taking a hard look at the overdraft fees charged by banks.
The agency announced Wednesday that it will seek information about the fees, commonly tied to checking accounts, and investigate whether consumers are being harmed by them.
“With today’s technologies, consumers have more opportunities to access their checking accounts and cause overdrafts,” said CFPB Director Richard Cordray. “But overdraft practices have the capacity to inflict serious economic harm on the people who can least afford it. We want to learn how consumers are affected, and how well they are able to anticipate and avoid paying penalty fees.”
Overdraft fees are levied on accountholders who attempt to withdraw funds that exceed what they currently have in an account. Citing “industry sources,” the CFPB said the average overdraft fee ranged from $30 to $35 in 2011 — up 17 percent over the previous five years. A 2008 study by the Federal Deposit Insurance Corporation found that consumers who overdrew 20 or more times per year ended up paying an average of $1,610 in overdraft fees.
The CFPB is also looking into the prevalence of banks processing larger transactions ahead of smaller ones, which could maximize the size of overdraft fees collected by the banks.
Commons Sense Review
You can’t balance a check book or you think you should be charged a fee for mismanagement of your account, no problem. This is crazy! The banks are covering their assets. When you become overdrawn many banks will cover that transaction and which the account hold is still responsible for and they add on a overdraft charge. .
This is not an unreasonable process. People don’t have a right to be irresponsible.
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