Bank Overdraft Fees At Record High
By Jay Weller
The average fee for Overdrafts, which is defined as withdrawing more more a checking account than a Customer has in their account, has been increasing to thirty dollars in 2013, an increase from twenty nine dollars in 2012 and twenty six dollars in 2009, according to an investigation by Moeb Services, Inc,
of 2890 Credit Unions and Banks.
The Federal Reserve in 2010 prohibited Banks from automatically penalizing Customers for Overdrafts. The Dodd-Frank Law of 2011 decreased the Debit Card fee large Banks were allowed to charge Merchants. This has caused a decrease in revenue for the Banks and they are trying to make up the difference through increase Overdraft fees.
Banks are now increasing Overdraft fees and pushing other services where such fees can be incurred, with the intention of creating a large group of Customers who can incur such fees.
There were 7.1 Overdraft occurrences per Customer last year, and Overdraft fees comprise the larger portion of fees that are generated by Banks from checking accounts. Banks earned 31.9 billion dollars in Overdraft monies in 2013, as opposed to 32 billion in 2012.
The Federal Regulation in 2010 mandates that Banks obtain permission from Customers in order to allow Overdrafts on Debit Card and ATM transactions. However, Overdraft fees tied to checks and some online bill pay accounts do not require Customer approval.