Overdraft Protection: Sounds Banal, Actually Quite Pernicious
Such fees are billed as a service to consumers, but they do a lot of harm to the very people they purport to help.
Americans pay nearly $14 billion in overdraft fees every year, according to the Center for Responsible Lending. It’s no surprise then that these fees —which are often sold to consumers as a protective measure against failed transactions when there’s not enough money in an account—are a big contributor to financial insecurity, especially for low-income Americans, many consumer advocates believe. And despite efforts from regulators and industry watchdogs over the past several years to decrease recurring fees, dubious overdraft operations continue to flourish at many banks.
On Tuesday, the Pew Charitable Trust released about overdraft practices at banks around the country. When looking at the 50
