Thursday, September 18, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Debit overdraft fees often exceed cost of purchase

By
From page B11 | August 01, 2014 |

WASHINGTON — The fees that banks charge debit-card users who overdraw their accounts usually cost more than the items being bought.

That’s the result of a study that the Consumer Financial Protection Bureau released Thursday.

Large banks have generally charged a $34 penalty when people overdraw their debit-card accounts, even though most of the purchases involved were for less than $24. And the penalties are charged even though most accounts return to a positive balance within three days, the study found. Banks profit by collecting more than half their checking account income from these fees.

The study builds on a 2013 report that found that heavy overdrafters, on average, face $900 in additional costs each year.

“Overdraft fees should not be ‘gotchas’ when people use their debit cards,” CFPB director Richard Cordray said in a conference call with reporters.

The CFPB is considering what protections might be necessary but has yet to outline specific policy changes that could shield bank customers from these charges. One area of concern for the CFPB is that some banks process transactions by size instead of the time of their purchase. This means the banks prioritize large expenditures such as rent or auto payments ahead of smaller purchases, possibly draining accounts such that buying a cup of coffee can trigger an overdraft fee.

The study found that 75 percent of all overdraft fees come from just 8 percent of bank customers. Younger Americans who frequently use debt cards are more likely to be charged fees. More than 10 percent of accounts belonging to 18- to 25-year-olds are hit with at least 10 overdraft fees a year. Nearly 36 percent of accounts belonging to 26- to 45-year-olds face at least one fee.

Not surprisingly, the fees weigh mainly on people who use their debit cards more often. Nearly half of bank customers with more than 30 debit transactions each month will pay one or more fees each year.

Richard Hunt, president and CEO of the Consumer Bankers Association, said in a statement that overdraft protection and the resulting fees are optional. Consumers can instead choose to have their transactions denied if they exhaust their accounts.

“We believe overdraft protection is a vital banking service voluntarily chosen by consumers to ensure their financial needs are met,” Hunt said.

 

The Associated Press

The Associated Press

LEAVE A COMMENT

Discussion | 1 comment

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • BaseballmomAugust 01, 2014 - 7:20 am

    Precisely. You can choose not to have overdraft protection. If you do not want the fees tell your bank to cancel the protection. Problem solved.... And no government agency is needed...

    Reply | Report abusive comment
.

Solano News

Theatre DeVille in Vacaville closes

By Barry Eberling | From Page: A1, 16 Comments | Gallery

 
 
Focus on school attendance now, always

By Mayrene Bates | From Page: A2, 1 Comment

 
Pepperbelly’s for sale

By Ryan McCarthy | From Page: A3, 4 Comments

Jury selection begins in 2011 Fairfield murder trial

By Jess Sullivan | From Page: A3

 
Seniors get help at Kroc Center health fair

By Barry Eberling | From Page: A3 | Gallery

Drug court success stories tell their tales

By Jess Sullivan | From Page: A3 | Gallery

 
Suisun City Senior Center seeks holiday donations

By Susan Hiland | From Page: A3

Lunafest returns to Fairfield in November

By Susan Hiland | From Page: A3

 
Weather for Sept. 18, 2014

By Daily Republic | From Page: B10

 
Fairfield police log: Sept. 16, 2014

By Susan Hiland | From Page: A10

Suisun City police log: Sept. 16, 2014

By Susan Hiland | From Page: A10

 
.

US / World

Emotions mount on final day of Scottish campaign

By The Associated Press | From Page: A1

 
More than 2,000 homes threatened in California fire

By The Associated Press | From Page: A4, 1 Comment

Maps provide early warning of California fire risk

By The Associated Press | From Page: A4

 
US military role in Iraq raises combat questions

By The Associated Press | From Page: A5

Police: Ambush suspect was military re-enactor

By The Associated Press | From Page: A5, 1 Comment | Gallery

 
House grudgingly approves arms for Syrian rebels

By The Associated Press | From Page: A5, 2 Comments

Ex-VA doctor: Phoenix report a ‘whitewash’

By The Associated Press | From Page: A5, 1 Comment

 
School district police stock up free military gear

By The Associated Press | From Page: A5, 4 Comments | Gallery

NASA’s Maven spacecraft reaches Mars this weekend

By The Associated Press | From Page: A5

 
Liberia president praises US for Ebola help pledge

By The Associated Press | From Page: A6

Obama reaffirms opposition to US combat in Iraq

By The Associated Press | From Page: A6, 1 Comment

 
AP Interview: Iraq premier says no foreign troops

By The Associated Press | From Page: A6, 2 Comments

Doctor says Toronto Mayor Rob Ford has cancer

By The Associated Press | From Page: A6

 
US scientist: Ebola unlikely to become airborne

By The Associated Press | From Page: A6

.

Opinion

 
Give new crime report a chance

By Kelvin Wade | From Page: A7, 27 Comments

 
Homeless find welcome in Vallejo

By Letter to the Editor | From Page: A7, 7 Comments

 
.

Living

Today in History: Sept. 18, 2014

By The Associated Press | From Page: A2

 
Community Calendar: Sept. 18, 2014

By Susan Hiland | From Page: A2

Horoscopes: Sept. 18, 2014

By Holiday Mathis | From Page: A9

 
My brother fails to make an effort to when it comes to my kids

By Kathy Mitchell and Marcy Sugar | From Page: A9

.

Entertainment

TVGrid

By Daily Republic Syndicated Content | From Page: B4

 
U2 returns to iTunes Top 100 — 26 times

By Los Angeles Times | From Page: B4, 1 Comment

Directors Guild finds TV diversity hiring stalled

By The Associated Press | From Page: B4

 
.

Sports

 
Giants snap tie in 9th, beat Arizona to narrow gap in West to 2

By The Associated Press | From Page: B1

49ers’ Kaepernick fined for inappropriate language

By The Associated Press | From Page: B1, 4 Comments | Gallery

 
Rodriguez gets 1st MEL soccer win since return to league

By Daily Republic staff | From Page: B1

Pegulas’ bid to buy Bills OK’d by NFL committee

By The Associated Press | From Page: B2

 
FSU benches Winston for 1st half of Clemson game

By The Associated Press | From Page: B2

Umpire West suspended 1 game for grabbing jersey

By The Associated Press | From Page: B2

 
After making ‘mistake,’ Vikings bench RB Peterson

By The Associated Press | From Page: B2

Sharks sign D Braun to 5-year, $19 M extension

By The Associated Press | From Page: B2

 
Rockets acquire Jason Terry, picks from Kings

By The Associated Press | From Page: B2

Panthers remove DE Greg Hardy from active roster

By The Associated Press | From Page: B2

 
Barry Bonds appeal heads back to court

By The Associated Press | From Page: B2

NFL, union agree to new drug policy, HGH testing

By The Associated Press | From Page: B2

 
Raiders rookie Derek Carr focuses on job at hand

By The Associated Press | From Page: B2 | Gallery

.

Business

Brown signs ride-sharing insurance legislation

By The Associated Press | From Page: B5

 
US homebuilder confidence soars in September

By The Associated Press | From Page: B5

Anthem, hospitals join to offer new insurance plan

By The Associated Press | From Page: B5

 
Drag queens dress down Facebook over names

By The Associated Press | From Page: B5, 1 Comment

Wells Fargo pays $290,000 in sex harassment case

By The Associated Press | From Page: B5

 
Fed signals plan to keep key rate at record low

By The Associated Press | From Page: B5

.

Obituaries

Margaret King

By Susan Hiland | From Page: A4

 
.

Comics

Garfield

By Daily Republic Syndicated Content | From Page: A8

 
Frank and Ernest

By Daily Republic Syndicated Content | From Page: A8

Rose is Rose

By Daily Republic Syndicated Content | From Page: A8

 
Pickles

By Daily Republic Syndicated Content | From Page: A8

Baby Blues

By Daily Republic Syndicated Content | From Page: A8

 
Beetle Bailey

By Daily Republic Syndicated Content | From Page: A8

Peanuts

By Daily Republic Syndicated Content | From Page: A8

 
Blondie

By Daily Republic Syndicated Content | From Page: A8

Zits

By Daily Republic Syndicated Content | From Page: A8

 
Dilbert

By Daily Republic Syndicated Content | From Page: A8

Wizard of Id

By Daily Republic Syndicated Content | From Page: A8

 
Sally Forth

By Daily Republic Syndicated Content | From Page: A8

Baldo

By Daily Republic Syndicated Content | From Page: A8

 
Get Fuzzy

By Daily Republic Syndicated Content | From Page: A8

For Better or Worse

By Daily Republic Syndicated Content | From Page: A8

 
B.C.

By Daily Republic Syndicated Content | From Page: A8

Crossword

By Daily Republic Syndicated Content | From Page: A9

 
Cryptoquote

By Daily Republic Syndicated Content | From Page: A9

Word Sleuth

By Daily Republic Syndicated Content | From Page: A9

 
Sudoku

By Daily Republic Syndicated Content | From Page: A9

Bridge

By Daily Republic Syndicated Content | From Page: A9