I’ve always had issues with overdraft fees. If you have too, then check out the following article I came across on CNN money. I wonder what this means for the future of banking. Any thoughts?
WASHINGTON (CNNMoney) — A controversial new government agency has its sight set on a consumer bugaboo: checking overdraft fees.
The defacto chief of the Consumer Financial Protection Bureau, Raj Date, said in a speech in Philadelphia last week that the bureau is going to start looking at overdraft programs with an eye toward clarifying the cost of free checking accounts
“With these free checking accounts, much of the costs to the consumer were buried in overdraft fees,” said Date, special adviser to the Treasury Secretary on the consumer bureau. “Going forward, the bureau will carefully assess how we can best ensure that the overall market for short-term credit is fair, transparent, and competitive.”
Date — who is administering the consumer bureau as it awaits the confirmation of its first director — said that one of the consumer bureau’s first big decisions could be setting guidelines for banks to make sure consumers know what they’re doing when they rack up overdraft fees.
In 2008, the Federal Deposit Insurance Corp. released a report into banking overdraft programs, revealing some little-known practices. The report found that 75% of banks automatically enrolled consumers in overdraft protection, often without their knowledge, and the median overdraft fee had been $27.
The report also unearthed that more than 93% of all overdraft fees came from a pool of consumers who overdrew their checking accounts at least five times or more per year, racking up an average of $215 in fees a year.
Read the rest of the article here.