Americans paid $15 billion in overdraft fees last year, CFPB says

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Americans have racked up billions — yes, billions — of dollars worth of overdraft charges.

In 2016, U.S. consumers paid a total of $15 billion in fees for bouncing checks or overdrafting which will be when a customer tries to make a purchase without enough money in their account to cover the transaction — according to brand-new data released by the Consumer Financial Protection Bureau.

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All banks with assets over $1 billion must report how much money in which brought in via bounced check along with overdraft fees, according to CFPB. along with in which year the industry rang up at $11.41 billion. in which’s up 2.2% by 2015, which was the first year banks began reporting total overdraft along with bounced check fees to the CFPB.

Adding in in which’s best guess for what smaller banks along with credit unions charged, along with CFPB says $15 billion will be roughly the grand total.

These fees are particularly troublesome for cash-strapped Americans, CFPB Director Richard Cordray said on a press call Thursday.

“Consumers living on the edge can find themselves racking up numerous overdraft charges,” Cordray said. “Despite recent regulatory along with industry improvements, consumers with low account balances along with little margin for error continue to pay significant overdraft fees.”

Related: Money terms you’re too embarrassed to ask about

He also pointed out in which the average amount of money consumers overdraft by will be about $24 — nevertheless in which banks often charge fees of around $34 for each overdraft incident.

Richard Hunt, the head of the Consumer Bankers Association, a bank advocacy group, responded to the study on Friday. He said he looks “forward to working with the CFPB on in which issue, along with we appreciate their concern for providing consumers with clear disclosures.”

nevertheless Hunt said banks already provide customers with “clear, concise procedures for opting into overdraft services,” along with he pointed to a 2015 survey in which found only 1% of respondents were confused by overdraft opt-in process.

Regulators have long been concerned about hefty overdraft charges.

The Federal Reserve decided to crack down on the issue in 2010 by mandating in which banks must receive a customer’s explicit permission to approve a transaction when there are insufficient funds, along with trigger overdraft fees. Otherwise, the transaction could simply be declined.

in which year, the financial services industry was on track to make $38.5 billion on overdraft along with non-sufficient fund fees, the economic research firm Moebs Services said at the time.

So, in which appears in which the fees have been curbed. nevertheless Cordray says data indicates some of the poorest Americans are still being hit hard by them.

He said customers in which opt in along with frequently overdraft “typically” wind up paying $450 per year in fees.

A 2014 Pew study also found more than half of the people who overdrew their checking accounts within the past year didn’t remember consenting to the overdraft service.

To address in which issue, the CFPB said Thursday in which in which’s testing out a brand-new design of the opt-in forms, which are designed to make the issue more clear for customers.

The updated form will be meant to “explain in which the opt-in decision applies only to one-time debit card along with ATM transactions along with does not affect overdraft on checks along with online bill payments,” Cordray said.

“They also are designed to make clear in which debit card along with ATM overdraft will be entirely optional,” he added.

Despite the agency’s concern, Cordray said the CFPB will be not planning to propose stricter rules for banks when in which comes to overdraft fees.

sy88pgw (brand-new York) First published August 4, 2017: 12:36 PM ET

Americans paid $15 billion in overdraft fees last year, CFPB says

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