Fees deducted from millions of consumer checking accounts are making legal and financial news in early 2016. Banks are reaping billions of dollars on just one fee: overdraft.
A new analysis by SNL Financial and CNN Money found that the nation’s three largest banks together collected more than $6 billion in overdraft fees last year. The analysis became possible due to new bank disclosures that went into effect last year.
Secondly, by Jan. 22, final federal court approval is expected on a proposed $24 million settlement of a 2010 lawsuit that challenged how Bancorp South posted the order of consumer transactions. The suit alleged that bank customers were charged overdraft fees even when their accounts had sufficient funds to avoid the fees. To maximize fees, the bank re-ordered consumers’ transactions so that accounts would be depleted more quickly and result in more transactions posted against a negative balance. Instead of a single overdraft fee being charged, the re-ordered postings led to multiple fees. The bank practice also resulted in inaccurate balances for customers searching for balances online.
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