The estimated median overdraft fee reached a record $30 last year -- up from $29 in 2012 and $26 in 2009, according to a Moebs Services poll of 2,890 banks and credit unions. Financial institutions generated $31.9 billion in overdraft revenue in 2013 compared to $32 billion in 2012, Moebs reported.
Although a 2010 rule from the Federal Reserve prohibits banks from automatically charging customers overdraft fees on debit card and ATM transactions, experts say they are trying to recover revenue losses on deposit accounts by hiking overdraft fees and hawking related services.
U.S. Bancorp, for example, began charging $36 in overdraft fees in August but eliminated the fee for transactions of $5 or less that trigger an overdraft. Boston Private Bank & Trust Co. began charging $30, up from $25. Many banks also offer overdraft protection programs that allow customers to link a checking account to another account that automatically transfers funds to cover an overdraft. Most banks charge a fee for each day that transferred funds are needed.
Overdraft fees have been widely criticized in recent years. Despite the Fed regulation, some say most checking accounts allow overdrafts even if consumers did not ask for it. Others accuse banks of processing transactions in an order that maximizes the number of overdraft fees incurred. The Consumer Financial Protection Bureau, concerned that overdraft services confuse consumers, is looking into issuing its own set of rules.