Aug 4, 2008 7:52 pm US/Pacific
Feds Consider Crackdown On Bank Overdraft Fees
SAN FRANCISCO (CBS 5) ―
The Federal Reserve is considering whether to crack down on those annoying bank overdraft fees. The agency is asking consumers to weigh in on the fees, which can cost consumers upwards of $35.
When you use your ATM card to buy something, you must make sure the money is there. Even if you expect the cash to be there by the time your purchase posts, you could get docked with a hefty fee.
"Right now there are a number of banks that are charging overdraft fees right when the transaction occurs," said Paul Leonard with the Center for Responsible Lending. "They are doing it because they are interested in maximizing fees and charging fees to consumers who are vulnerable to excess fees."
Bank of America told CBS 5 ConsumerWatch it has a "float time" and only charges fees if the funds don't arrive by the end of the business day.
Leonard said banks should give consumers a choice. He said, "They should ask the consumer if they want the $35 charge for the charge associated the transaction or would they want to cancel the transaction? This seems like a better way to go."
Consumer Erika Stahlnecker said surprise late fees make her feel less sure of her bank.
"It ends up feeling like you're been scammed," she said.
Federal regulators are inviting consumers like Erika to weigh in. The
Federal Reserve website is already reviewing more than 15,000 comments while it decides how to crack down on overdraft fees which are coming at a time Leonard said consumers can least afford them.
"With the credit crisis, price of gas, price of groceries, borrowers are stretched more and have a more difficult time managing their budget," Leonard said.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
Stumble It!
Reporting
Comments