Overdraft Protection Can Be Expensive For Consumers
Eileen Alt Powell of the AP reports on the costs some consumers are charged for overdraft protection. A few weeks ago, Federal regulators issued proposed new guidance to financial institutions regarding these kinds of overdraft protection programs.
Consumer advocates contend that the new service -- which they call bounced check loans -- can result in fees equivalent to an annual interest rate of 240 percent or more. They've called for federal regulation of the practice.Earlier this month, national bank regulators said financial institutions could continue offering the new programs. But the regulators also issued guidelines that would require banks and credit unions to do a better job informing consumers about the risks and costs. The public has 60 days to comment before the guidelines are adopted.
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