After remaining flat for two years, overdraft fees are now headed up, according to a new report by the Consumer Federation of America.
The average fee remains $35. But U.S. Bank and Fifth Third Bank announced they are making changes to their fee structure, a sign that fees are rising again to as much as $37, the consumer group says.
The CFA says bank policies mean that consumers can end up paying up to $370 in overdraft fees in a single day.
The CFA’s survey is based on the largest 14 U.S. banks.
Fifth Third, for instance, charges $25 for the initial overdraft. But later this month, the CFA says, the bank will charge $37 for each subsequent overdraft. The bank has been charging $33 for subsequent overdrafts within a year.
U.S. Bank will charge $15 for an overdraft of $15 or less, the consumer group says, and $35 for higher overdrawn amounts. The current structure is $10 for being overdrawn no more than $20, and a fee of $33 for larger sums.
“Bank overdraft loans are a form of payday lending,” says the CFA’s Jean Ann Fox in a press release.
On that premise, the CFA calculated how much a consumer would pay in annual interest for overdrawing $100 in repaying it in two weeks. RBS Citizens Bank would charge the most at a rate of 2,779 percent.
