[Vision2020] Whores Don't Tell You If They Are DIseased

[Art Deco]

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June 10, 2012
More Debit Card Follies and Abuses

The federal Consumer Financial Protection
Bureau<http://www.consumerfinance.gov/>needs to bring transparency to
debit card banking. The Federal Reserve made
a good regulatory start in 2010, when it required banks to get account
holders’ consent before enrolling them in overdraft “protection” programs
that could cost them $35 each time they used a debit card and overdrew
their account — the cards provide no warning of insufficient funds.
Customers who did not opt in would have their purchases declined.

The regulations were sound, but consumers immediately complained that some
banks failed to explain the opt-in policy or even pressured customers into
taking it by saying that their debit cards might no longer work.

A new study of the nations’ 12 largest banks and 12 largest credit unions
by the Pew Charitable Trusts safe checking project shows that consumers are
still being intentionally kept in the dark. Disclosure forms containing fee
information now run a median length of 69 pages for banks and 31 pages for
credit unions. Both banks and credit unions use many different names to
describe overdraft fees, making comparison shopping by consumers nearly
impossible.

The median bank overdraft fee has remained steady at $35 since 2010. But a
growing number of accounts are also subject to an “extended overdraft
penalty” — $33 is the median — that applies if the charge is not promptly
paid. These costly games will continue until regulators require banks to
provide clear, concise pricing information. They must also require that
overdraft fees be reasonable and proportional to the amount of the
overdraft.


-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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