Overdraft fees stay steep at largest US banks

Associated Press

NEW YORK

The country’s largest banks are still charging steep overdraft fees.

A survey released Wednesday by the Consumer Federation of America found that the median overdraft fee is $35, the same as it was last year. The highest fees also remain $33 to $37 per overdraft.

The fees can be triggered if customers overdraw their checking accounts by as little as $5. In addition, the survey found that two-thirds of banks continue piling on fees if customers fail to balance their accounts within a set time. For example, JPMorgan Chase charges an “extended overdraft” fee of $15 after each five-day period that an account stays in the red.

The findings come a year after a new regulation went into effect requiring banks to obtain permission from customers before enrolling them in overdraft programs. Previously, it was industry practice to enroll customers automatically without giving them a way to opt out.

Critics said that led to consumers’ unwittingly racking up overdraft fees. The problem was that customers often would continue using their debit cards, not realizing they could spend more than they had in their bank accounts.

Under the new rule, customers now must actively consent to be enrolled in overdraft programs. If they opt out, their debit card would simply be declined at the register if they didn’t have enough money to cover the transaction. The rule does not limit how much banks can charge in overdraft fees, however.