Debit Cards’ Hidden Fees
The press is picking up on the Center for Responsible Lending's report on bank overdraft fees and overdraft loans. The CBS Evening News covered the story In an article titled 'Debit Cards' Hidden Fees" citing the study's conclusion that "the single largest use of overdrafts was using your debit card. And those debit card purchases are very small. If you were to calculate an annual percentage rate interest for that loan, it would usually be well into the five digits."
The Los Angeles Times covers the story in an article titled "Overdraft fees huge but hushed".
The House Subcommittee on Financial Institutions and Consumer Credit held a hearing on the subject Overdraft Protection: Fair Practices for Consumers yesterday. The chair, Congresswoman Maloney, who has introduced legislation (H.R. 946) dealing with these fees, said in her opening statement that "In my view, banks should be able to charge whatever they want - let me say that again, banks should be able to charge whatever they want - for the service of overdraft protection, but individuals should have notice of the charges ahead of time and the opportunity to reject the transaction before incurring the charges. It’s that simple."
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