Overdraft News

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The latest news on overdraft fees, overdraft fees and other bank fees from the Center for Responsible Lending.

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  • TD Bank Issuing Refunds for Overdraft Charges in Wake of Class Action Suit 
    MassLive.com  17 Jun 2013
    Former and current TD Bank customers affected by a March settlement over the way it calculates overdraft charges are finally beginning to receive refunds.
  • Rep. Maloney Calls for Crackdown on Excessive Overdraft Fees 
    CBS New York  15 Jun 2013
    Rep. Carolyn Maloney (D-N.Y.) has introduced legislation designed to rein in exorbitant overdraft charges. Although some measures have already been approved to reform the practice...
  • Banks Fight Back Against Overdraft Reporting Requirement 
    American Banker  04 Jun 2013
    The banking industry is responding negatively to a proposal that banks' financial reports to regulators include details of how much money they make from overdraft charges and other consumer fees...
  • Overdraft Revenues Hold Firm But Regulators May Step In 
    American Banker 03 Jun 2013
    New research from Moebs Services has found that overdraft revenue at banks, thrifts, and credit unions leveled off over the last year as the industry adjusted to new regulations...
  • Banks Improving on Fee Disclosure, But More Rules Needed, Pew Says 
    Washington Post 31 May 2013
    Banks are doing a better job of informing customers about the costs associated with checking accounts, but additional rules are needed to ensure that terms are clear and fair, concludes a new report from the Pew Charitable Trusts...
  • First Merchants Accused of Overdraft Fee Violations 
    Indianapolis Business Journal  29 May 2013
    Indiana-based First Merchants Bank is being accused of reordering customers’ checking account transactions to drain accounts faster and make checks bounce more frequently, triggering millions of dollars in overdraft fees...
  • Looming CFPB Overdraft Rules Could Hit Some Banks Harder Than Others 
    American Banker  28 May 2013
    Future overdraft rules likely will have a bigger impact on banks that have not changed their practices much since a 2010 rule requiring them to give customers a choice on overdraft coverage.... .
  • Wells Fargo Ordered to Pay $203 Million in Overdraft Case 
    Reuters 15 May 2013
    A federal judge once again has ordered Wells Fargo to pay $203 million to settle charges that it levied excessive overdraft fees, maximizing the penalties by purposefully processing transactions from the largest dollar amount to the smallest. The ruling brings back a penalty that U.S. District Judge William Alsup handed down in August 2012...
  • Huntington Changes Policy on Posting Checking Transactions, Will Save Customers $25 Million in Overdraft Fees 
    Cleveland Plain Dealer (OH)  09 May 2013
    Huntington Bank has changed how transactions are posted to its consumer checking accounts, potentially reducing the number of customer overdrafts. Banks traditionally process debits from the highest dollar value to the lowest, often causing one large transaction -- such as a mortgage payment -- to drain the account, leaving smaller transactions to bounce and rack up multiple overdraft fees...
  • Small Banks Seek Exemption in U.S. Collection of Fee Data 
    Bloomberg 02 May 2013
    The Independent Community Bankers of America has asked federal regulators to exempt them from what they call an unnecessary and onerous data-collection effort to spot how consumers may be fleeced by checking account overdraft fees and other charges...
  • Citizens Bank of Pennsylvania to Refund $1.4 Million to Customers in Deceptive-Marketing Settlement 
    Pittsburgh Post-Gazette  01 May 2013
    While admitting no wrongdoing, Citizens Bank of Pennsylvania has agreed to a $6.4 million settlement over claims that it used deception in promoting its overdraft protection and checking rewards programs...
  • Mobile Tools, High Fees Quash Demand for Overdraft Protection 
    The Financial Brand 23 Apr 2013
    Mobile banking and high fees have led to a decline in consumers' demand for overdraft protection. Bank revenue from overdraft fees fell in 2010 and 2011 because of Federal Reserve rules that changed how banks can charge for “overdraft protection.” Banks reported higher fee revenue in 2012 because of hikes in overdraft-related fees, but there are reasons to believe that these costs have hit a ceiling...
  • U.S. Overdraft Fees Jump to $32 Billion as New Rules Prove Ineffective 
    Huffington Post  29 Mar 2013
    Americans paid more in overdraft fees last year, although a measure was passed in 2010 to curtail abusive overdraft charges. A report by Illinois-based Moebs Services found that banks and credit unions increased their 2012 overdraft fee earnings by 1.3 percent over the previous year to $32 billion...
  • House Democrats Introduce Overdraft Fee Bill 
    American Banker 21 Mar 2013
    Reps. Maxine Waters (D-Calif.), Carolyn Maloney (D-N.Y.), and 44 co-sponsors have proposed the Overdraft Protection Act to address concerns about the fees that banks charge customers who spend more money than is available in their accounts...
  • Justice Department Probing Banks' Role in Fraud by Customers 
    Reuters 20 Mar 2013
    The U.S. Justice Department is probing the role financial institutions play in fraud schemes perpetrated by bank customers pitching dubious products...
  • Overdraft Revenue Makes First Climb in Three Years: Report 
    American Banker 19 Mar 2013
    Overdraft revenue at banks, thrifts, and credit unions hit $32 billion in 2012, up 1 percent from 2011, reports Moebs Services. The total represents the first increase since 2009, when financial institutions raked in $37.1 billion in from overdraft fees. The steepest penalties are found at the biggest banks...
  • Banks Say This Is Not Simply a New Way to Squeeze Profits From Unsuspecting Customers 
    ABCNews.com  17 Mar 2013
    Many banks are being criticized for reordering checking account transactions in order to drain available funds more quickly and accumulate more overdraft fees. Veronica Gutierrez filed a class-action lawsuit against Wells Fargo over the practice and won $203 million in restitution for herself and others...
  • Overdraft Rules Get Go-Slow Approach at Consumer Bureau 
    Bloomberg Businessweek 28 Feb 2013
    The Consumer Financial Protection Bureau (CFPB) has decided not to take severe action just yet to tighten rules on checking overdraft fees. CFPB director Richard Cordray said no decisions have been made about new rules but indicated that the agency will work on the matter “over the next couple of years.” Consumer groups want tougher overdraft rules, arguing that a 2010 Federal Reserve rule requiring banks to secure consumer consent before charging the fees did not go far enough. "Overdrafts are rife with predatory features: they are high-priced, short-term and repaid directly from customers' accounts," declared Rebecca Borne of the Center for Responsible Lending (CRL). "None of that has changed." The organization believes that about a third of U.S. consumers are choosing overdraft services under the Fed rule; while Moebs estimates the opt-in rate on the high end at 77 percent and the Consumer Bankers Association puts it at the low end at about 17 percent. Cordray also said that the CFPB is considering whether conflicting rules from different federal regulators harms oversight of overdraft fees.
  • Susquehanna Latest Bank to Settle Excessive Overdraft Fees Litigation 
    Philadelphia Business Journal 27 Feb 2013
    Susquehanna Bancshares in Lititz, Pa., has settled a lawsuit with customers who challenged the company's overdraft fee policy. Without admitting wrongdoing, the bank agreed to pay about $3.7 million to settle the litigation. Consumers have sued a number of banks, claiming that they wrongfully shuffled the order of debit card processing and ATM transactions as a way to maximize fee revenue. Bank of America, Citizens, PNC Bank, and TD Bank are among those that have settled or are seeking court approval of settlements.
  • Bank Fees Are Rising for Checking Accounts, Overdrafts, ATMs 
    St. Louis Post-Dispatch 19 Feb 2013
    A new survey by MoneyRates.com has found that bank fees are on the upswing. The average monthly fee for a checking account is up 18 cents to $12.26 over the past six months, while overdraft fees have also grown 18 cents to reach an average of $30.01. The fee for non-customers using an ATM has risen 20 cents to $2.60. On a positive note, MoneyRates said that 37 percent of checking accounts charge no fee at all. Fees at online-only banks are generally holding steady, while fees associated with banks with branches are climbing. For the study, MoneyRates surveyed the 50 largest U.S. banks as well as 50 medium and smaller-sized banks.
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