Consumer watchdog assessing overdraft fee practices

February 26, 2012 Off By administrator

Consumer watchdog assessing overdraft fee practices
News from Boston Globe:

Bank overdraft fees drive me crazy. Sure, overdraft protection is a good backup for the times you miscalculate, but sometimes the fees run into the hundreds of dollars a month and are the most burdensome on the people least able to afford them.

Well, the Consumer Financial Protection Bureau intends to do something about this. The bureau is investigating banks’ overdraft practices and their effect on consumers’ finances.

If you have overdraft protection, your bank will cover the transaction so your check won’t bounce but will charge you a fee. The average overdraft fee ranged from $ 30 to $ 35 in 2011 and has increased by 17 percent over the past five years, according to the bureau.

The bureau wants to know whether financial institutions are employing methods to increase the likelihood that customers are hit with overdraft fees.

“We are concerned that overdraft practices employed by some banks unnecessarily increase consumer costs by making it difficult to anticipate and avoid fees,’’ Richard Cordray, director of the CFPB, said during a town-hall meeting in New York announcing the agency’s plan to study overdraft protection.

Of particular concern is how certain transactions are processed. Some banks do not process transactions in the order in which you make them. Instead they collect the transactions from a specified pe…………… continues on Boston Globe

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Consumer watchdog agency probes checking-account overdraft fees; misleading …
News from Minneapolis Star Tribune:

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