Friday, May 29, 2009

Skyrocketing bank fees

U.S. House Democrats are urging the Federal Reserve to issue rules requiring banks to obtain approval from customers before allowing them to overdraw from their bank accounts using debit cards and automatic teller machines, a step that could include a hefty fee.

Reuters reports that the proposals would apply only to electronic fund transfers using debit cards and automatic teller machines.

The Federal Reserve is considering new rules on possibly requiring banks to offer customers an opt-in to overdraft programs or whether an opt-out mechanism is sufficient.

Overdraft fees is the next area lawmakers want to address. This comes after Congress passed a comprehensive credit card bill. Consumers had lodged complaints of hidden fees and unexpected changes to their credit card terms and billing practices.

Meanwhile, USA Today reports that banks are finding ways to boost fees, with checking accounts being the latest target. Click here for details.

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