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Bank Fees Up Again, Despite Government Intervention

NEW YORK (MainStreet) -- Just when you thought it was safe to go back to the ATM, bank fees are up again -- even though legislative and regulatory actions by the federal government two years ago sought to curb such costs.

According to the Consumer Federation of America, bank fees are "inching upward" after 24 months or so of level activity.

Bank fees are up again, even though legislative and regulatory actions by the federal government two years ago sought to curb such costs.

The CFA says that timeline is no coincidence. The two-year period of flat fee growth came right after the Federal Reserve enacted a rule making banks get approval from consumers before covering bank overdrafts -- usually for a fat fee.

Before the Federal Reserve rule, banks would transparently cover checking account overdraft fees and sock consumers with an "overdraft fee" of up to $36 per overdraft.

Those fee amounts really haven't changed that much. The CFA reports that the average overdraft fee is $35 per transaction. What has changed, however, is how those fees stack up against many consumers, the association says.

"Big bank overdraft fees for a single transaction are very high, ranging from $33 to $37 at the largest banks," says Jean Ann Fox, director of financial services at the CFA. "Consumers can be charged up to $370 in one day, according to the maximum fee and daily limit fee policies that banks have."

That's pretty much the blueprint for bank overdraft policies today. Banks are targeting habitual offenders and piling up the fees for those customers. A slew of big banks, including U.S. Bank (USB) and Fifth Third Bank (FITB) have implemented "tiered" fee policies that rise as overdraft transactions mount.

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