Those who are fed up with bank fees are offering their tales of overdraft woe to regulators to encourage stricter guidelines for when and whether banks can charge them.
Banks often charge overdraft fees when customers attempt to take more money out of their accounts than they have available, rather than blocking the transactions. Consumers can get charged high fees for very small purchases and banks can process transactions in whatever order they see fit.
For instance, say a customer has a $20 balance. Her $100 paycheck clears on Friday, the same day she made five purchases worth $24. If the bank clears the debits before the credit, she could get hit with several overdraft fees -- one for each purchase that was made beyond the $20 level.
Each fee runs $34 on average, according to the Center for Responsible Lending, which is overseeing the campaign to email regulators. The center says that a new rule proposed by the
that would allow consumers to opt out of overdraft programs doesn't do enough.
"Banks can intentionally maximize the overdraft fees you pay by automatically approving debit card purchases that throw your account balance into the negative and by manipulating their debit-clearing systems," the center said in a statement. "At the least, the Fed should make them get your approval before charging you these fees."
Federal banking regulators
the overdraft rule as part of a set of standards to protect consumers from fees, sudden interest-rate hikes and a practice known as "double-cycle billing," in which a company charges interest on debt that has already been repaid. Congress is also considering more comprehensive legislation that would make changes to interest rates, fees, billing, payments and disclosures.
It's unclear how regulations will ultimately shape up, so it's important for consumers to be
about their spending and their bank's rules.
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