Report: Banks Misusing Overdraft Fees

Regulators have a pile of concerns with the charges

   

Last year, overdraft fees in the U.S. generated about $32 billion in revenue.

Bank of America (BAC) charges $35 for each overdrawn item, while Wells Fargo‘s (WFC) charges are different in each state, also hitting up to $35.

Now, though, regulators have been keeping a closer eye on that huge stream of cash. In fact, the Consumer Financial Protection Bureau is set to release and report Tuesday, and word is that it won’t be pretty.

According to The Wall Street Journal, the U.S. banking industry’s use of overdraft fees comes with a host of problems, which “range from confusing rules on overdraft fees to increasing the likelihood of multiple fees being charged to the same customer.”

There hasn’t been a crackdown on the fees for three years, when the Federal Reserve required that banks warn consumers when a transaction would mean an overdraft fee.

The agency did say that it is not set out to ban the fees altogether, though.


Article printed from InvestorPlace Media, http://investorplace.com/2013/06/report-banks-under-heat-for-overdraft-fees/.

©2014 InvestorPlace Media, LLC

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