NEW YORK (MainStreet) – Remember Dodd-Frank financial reform and the promise that new federal regulations would curb bank overdraft fees? Well, not so much.
The Consumer Federation of America is out with a new report (PDF) finding that despite new rules that say banks must get permission from customers before charging overdraft fees, such fees are still on the rise. The group says that such fees at 14 large banks average $35 per overdraft, with some as high as $37 per overdraft.
In addition, some banks have readjusted the number of overdraft fees they can charge on a daily basis. BB&T, for example, hiked its daily allotment from four overdraft charges to eight and Regions Bank upped its overdraft fee limits from four to six, the CFA reports. One big bank – TD Bank (Stock Quote: TD) – actually reduced its overdraft daily limits, but only from six overdrafts to five.
“Bank overdraft fees at the largest banks remain steep, ranging from $33 to $37, and far exceed the typical $20 debit card overdraft,” stated Jean Ann Fox, director of financial services for CFA. “Some banks have hiked the number of overdraft fees consumers can rack up in a single day to as many as 10, costing consumers as much as $370 in just one day.”The groups says that overdraft fee policies – even with the government rules in place – are still stacked heavily in favor of banks.
“One year after the Federal Reserve required banks to get customers’ permission to charge overdraft fees on debit card transactions, fees charged by banks have not dropped for what amounts to short-term loans,” the report states. “While some banks have modified the order in which they process payments from accounts, most banks continue to pay the largest transactions first, which can drive up overdraft revenue at the expense of struggling families.”