All Articles Tagged "overdraft protection"
Overwhelmed and Racking up Overdraft Fees
(Daily Finance Wire) — Overdraft fees are like a movie monster that just won’t die. No amount of public outrage or regulation can slay the beast. But the banks aren’t the only ones casting overdrafts in financial sequels: Truth is, consumers who don’t properly manage their accounts, or who have money problems, keep breathing life into the overdraft dragon. ”Overdrafts are part of the small advance and loan market,” explains G. Michael Moebs, CEO of Moebs Services. Other parts of that “market” include credit card cash advances, transfers from deposit accounts or small lines of credit, payday loans, pawn loans, even gifts and loans from family and friends — and at the extreme, loan sharks. “The surprise is, no matter how much government tries to regulate and legislate away this small loan market, it keeps coming back,” says Moebs. “People want and need a funding safety net.”
Overdraft Abuse Continues Amid New Rules
(Daily Finance) — A year after the Federal Reserve enacted new rules to rein in abusive bank overdraft practices, fees remain high and some institutions actually have slapped on additional penalties, according toa new survey of the nation’s 14 largest banksby the Consumer Federation of America. Last year, the Fed prohibited banks from enrolling consumers in overdraft protection programs unless they choose to “opt-in.” Previously, most banks automatically covered payments that exceeded the account balance, charging a fee for each offense, along with additional fees if customers didn’t quickly repay the loan quickly. While the rules have helped, major issues remain, consumer advocates say.
Customers Opt in for Overdraft Protection
(Wall Street Journal) — As the holiday-shopping season kicks off, there is one thing most consumers won’t be leaving home without: an overdraft cushion. Rather than face the embarrassment of being declined a purchase, 75% of consumers are opting to pay a fee—sometimes as much as $34—each time they overdraw on their debit-card account, according to Moebs Services Inc. The choice is a recent one, thanks to new rules that came in as part of an overhaul of consumer-protection regulations. Since Aug. 15, banks have been required to ask consumers to “opt in” for overdraft protection on their debit cards and the added fees. Previously, that fee would be automatically charged without a customer’s explicit consent. If consumers don’t opt for the overdraft, the bank will now decline the purchase.
