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SACRAMENTO – An analysis of new government data by California Public Interest Research Company (CALPIRG) found that big banks made $8.4 billion in overdraft fee income in the first three quarters of 2016, up nearly four percent from the same period in 2015. Since the beginning of 2015, all banks with greater than one billion dollars in assets have been required to report fee data quarterly and are included in the study.
“Banks that relied most heavily on overdraft revenue had more complaints to the Consumer Financial Protection Bureau (CFPB) in the complaint category 'account funds being low,'" said Ruth Rothstein, a consumer advocate with CALPIRG. “It’s clear that we need to protect a strong CFPB to make sure banks are following the law.”
Key highlights of “Big Banks, Big Overdraft Fees,” co-written with The Frontier Group, include the following:
“It’s clear from these findings that the CFPB works, and it works for consumers,” added Rothstein. “Congress should reject efforts from banks, payday lenders and debt collectors to weaken the CFPB.”
In 2010, regulators announced new Overdraft Protection Rules. The rules prohibit banks from allowing overdrafts on debit and ATM transactions unless a consumer has affirmatively opted-in or said “Yes.” The CFPB has expressed concerns over marketing of overdraft protection products and continues to study the problem. Consumers can still face overdrafts on checks or automated recurring payments.
“Many consumers can cut their exposure to overdraft fees by opting out of 'standard overdraft protection,' which allows large overdrafts even on small transactions with debit cards,” added Rothstein. “Would you rather have your card declined at a coffee shop or pay a $35 fee for a $3 latte."
For more information about CALPIRG’s overdraft fee tips, visit http://uspirg.org/blogs/blog/usp/you-might-not-know-about-overdraft-fees.
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