Banks Respond to Pressure on Overdraft Fees
July 9, 2012
A recent decision by Chase Bank to discontinue its practice of charging overdraft fees for small transactions may indicate the start of a trend by banks around the nation. The decision comes on the heels of a class-action lawsuit against several of the country's biggest banks over how they process debit card transactions. Additionally, 14 banks agreed to a multi-million dollar settlement in a case accusing the financial institutions of processing debit card transactions from high to low, to maximize overdraft fees. The Consumer Financial Protection Bureau (CFPB) announced that it was investigating overdraft practices and policies back in February. As part of its settlement, Chase agreed not to impose overdraft fees for transactions of less than $5 beginning on July 22, 2012. The bank will also process transactions in chronological order.
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