CFPB Report: Typical Overdraft Situation Is Comparable To Small-Dollar Loan With 17,000% Interest Rate

CFPB Report: Typical Overdraft Situation Is Comparable To Small-Dollar Loan With 17,000% Interest Rate

If you’re one of the hundreds of millions of consumers who use a debit card you’ve likely found yourself on the receiving end of an overdraft fee when your account balance just wasn’t quite enough to make a desired purchase. While consumers might not necessarily question the occasional overdraft fee, a new report from the Consumer Financial Protection Bureau puts the fees into a disconcerting perspective. [More]

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Wells Fargo To Stop Reordering Check Transactions; Should Reduce Overdraft Charges

A little talked-about way in which banks maximize overdraft fees is by processing transactions not in the order in which they are received, but in a way that results in the largest number of overdrafts. Now the folks at Wells Fargo are putting an end to this practice for its checking account customers. [More]

Despite Regulations Most Consumers Don’t Understand Overdraft Penalty Plans; More Rules Needed

Despite Regulations Most Consumers Don’t Understand Overdraft Penalty Plans; More Rules Needed

Since 2010, financial institutions have been required to obtain an opt-in confirmation from consumers before enrolling them in overdraft penalty plans, yet a new report found more than 50% of consumers who incurred such penalty fees in the past year don’t believe they opted into any such plans. This revelation, coupled with consumers’ concerns over fees and bank practices, has led to a call for federal regulators to improve rules governing financial institutions’ overdraft policies. [More]

Banks Inside Walmart Stores Lead Nation In Raking In Fees From Customers

Banks Inside Walmart Stores Lead Nation In Raking In Fees From Customers

A number of different banks operate branches inside more than 1,000 Walmart stores in the U.S., and many of these banks market themselves to consumers who may not be targeted by larger institutions because of low income or lack of savings and credit. A new analysis of the institutions most frequently found at Walmart found that these banks are also the most reliant on charging fees to their customers. [More]

Banks Improve Disclosures, Falling Behind On Overdraft Fees, Binding Arbitration Clauses

Banks Improve Disclosures, Falling Behind On Overdraft Fees, Binding Arbitration Clauses

Checking accounts come in all shapes and sizes to fit every consumer’s needs – fine, not every consumer. While options can be good when you’re shopping around for a new bank, they also lead to a plethora of fees and risks for consumers. While some practices have improved, a new Pew Charitable Trusts report shows banks have a long way to go and it’s time the Consumer Financial Protection Bureau took action. [More]

Stories You Might Have Missed Because You Were Too Busy Being Awesome

Stories You Might Have Missed Because You Were Too Busy Being Awesome

We post a lot of stories during the week, and we know that most of you have jobs, families, lives, hobbies, nagging itches and other more important things to do than read every single thing we write. So for those who might be playing catch-up on the weekend, here are some of the things you might have missed… [More]

As Fewer People Overdraft, Banks Are Raising Overdraft Fees

As Fewer People Overdraft, Banks Are Raising Overdraft Fees

If you’re still opted-in to overdraft “protection” — which protects you by slapping huge fees on every purchase you make beyond the available funds in your account — you should probably opt out, as the costs associated with this lucrative system are on the rise. [More]

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Bank Of America’s New Debit Card Charges $5/Month For Something That Is Free On All Accounts

Bank of America is in the news because it’s testing a new debit card that won’t let customers overdraft. For that privilege, cardholders will pay a $4.95/month fee and they won’t be able to write paper checks. Thing is, anyone with a bank account can turn off overdraft protection without being required to pay a fee. [More]

Big Banks Don’t Want To Be Transparent About Checking Fees If Little Banks Don’t Have To Be

Big Banks Don’t Want To Be Transparent About Checking Fees If Little Banks Don’t Have To Be

If we were to play a word-association game with the nation’s largest banks, we’re sure that terms like “fair” and “equitable” would be right on the tip of peoples’ tongues. And because big banks always play fair with everyone else, they are asking that their checking-account fees not be put under the regulatory microscope if smaller banks’ fees aren’t going be subject to the same scrutiny. [More]

Prepaid Debit Cards: Salvation From Overdraft Fees Or Putting Your Money At Risk?

Prepaid Debit Cards: Salvation From Overdraft Fees Or Putting Your Money At Risk?

No overdraft penalties, no overspending and sometime low but occasionally ridiculous fees are all perks that have led consumers to an increased use of prepaid debit cards in the last year. And while the cards are convenient there are plenty of reasons consumers should by wary. [More]

Banks That Market To & Serve Military Also Tacking On Huge Fees

Banks That Market To & Serve Military Also Tacking On Huge Fees

One might assume that banks marketing to U.S. military servicemembers would not be out to nickel and dime these men and women with unnecessarily high fees on their accounts. But among those financial institutions levying the highest level of fees on its account-holders are several that not only market to the military but also have branches on military bases. [More]

BOfA Stops Overdraft-Friendly Practice Of Re-Ordering Transactions From High To Low

Time-stamped debit purchases will now be processed in the order in which they are made, not from highest-to-lowest in value.

As we’ve noted multiple times over the years, some banks love to lump all transactions made by a customer during a day or weekend together and then process them not in the order they were received, but from largest to smallest. For customers on the brink of overdrafting, this can result in numerous fees that may have been avoided if the charges had been processed chronologically. In a rare bit of positive Bank of America news, the bank has decided to stop this high-to-low transaction processing (for many debit purchases). [More]

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CFPB: Bank Customers Leaking $225 In Overdraft Fees Per Year On Average

Why is your bank account leaking so much money ever year? Where does it all go? Checking account customers are bleeding funds to the tune of about $225 per year on average, the Consumer Financial Protection Bureau says in a new study. That means that despite regulations aimed at lessening the effects of overdraft fees and clear up the whole process. [More]

Click on the image to see how each of the surveyed banks fared in the Disclosures categories.

Consumer-Friendly Checking Account Practices Vary Wildly From Bank To Bank

Unless you’ve been hiding under a bed for the last six years, you probably know that the banking industry isn’t exactly beloved by many American consumers. As a reaction to public sentiment (and threats of regulation), a number of banks have begun phasing in some more consumer-friendly practices, but a new study shows these changes are not industry-wide and that several banks are still years behind. [More]

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Banks Raking In Billions In Profits From Overdraft Fees

The notion behind an overdraft fee — in which a bank customer is charged a penalty for overdrafting his account — is twofold: To incentivize consumers to pay attention to how much money is in their accounts, and to allow the bank to recoup any money it lost by covering the overage. But a new report claims that these fees have become such a profit center for banks that it’s now in their interest to push account-holders with low-balance bank accounts toward overdrafting. [More]

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Here’s Where Your Money Is Going: Consumers Paid $32 Billion In Overdraft Fees Last Year

Making the case for new overdraft legislation is a pretty big bit of evidence that shows just how hard those fees hit our wallets: Last year consumers paid a whopping $32 billion in overdraft fees, a $400 million jump from 2011. This, despite regulations that seek to protect consumers from such hefty charges. [More]

(James Callan)

New Legislation Seeks To Rein In Overdraft Fees

Bank overdraft fees can pile up rapidly, making it increasingly more difficult for a consumer to get back to zero, which is why Congresswoman Carolyn Maloney of New York recently introduced legislation aimed at limiting how much and how frequently banks can ding account holders for these fees. [More]

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Court: Wells Fargo Misled Customers About Debit Card Transactions But Doesn’t Have To Pay Back $203 Million (Yet)

It was a good news/bad news day at the Ninth U.S. Circuit Court of Appeals yesterday, as the court set aside a $203 million judgement against Wells Fargo for the way it processed debit card transactions, but kept the door open to hope that consumers might see some of that money. [More]