June 11, 2012 – Pew Charitable Trusts reiterated its call for new limits on overdraft fees and better disclosures in a survey report released last week amid an ongoing request for information from the Consumer Financial Protection Bureau on overdraft programs.
This report, which also looks at other types of checking-account-related fees and practices, follows up on one from April 2011. That report looked at the largest 10 banks. The one released last week was expanded to include information found on the websites of the nation’s 12 largest banks and 12 largest credit unions.
Results varied in terms of amount and types of fees charged, with credit unions, on average, assessing lower overdraft fees. Credit union disclosures on checking (share draft) account fees and terms also tend to be briefer.
Overall, however, Pew concludes that fees are still too high, disclosures are too lengthy and confusing and depository institutions still order transactions, generally, in a way that maximizes fees. (It noted the opposite with respect to Navy FCU, which discloses that it orders debit transactions for processing from the smallest to largest.)
Pew is recommending that Congress or the Consumer Financial Protection Bureau, which still has its overdraft program information request out for comment, take measures that would require depository institutions to:
- provide uniform overdraft program disclosures;
- provide clear, comprehensive terms and pricing information for all available overdraft options;
- charge only reasonable, proportional overdraft fees; and
- post deposits and withdrawals in a fully disclosed, objective and neutral manner that does not maximize fees.
Comments on the CFPB request for information on overdraft programs are due June 29. NAFCU will file a comment letter using input from its member credit unions.