The federal consumer protection watchdog has tackled a number of practices that may be costly for banking customers and is now setting its sights on a popular fee financial institutions charge.
The federal Consumer Financial Protection Bureau recently announced it will look into the overdraft policies maintained by major banks, according to a report from the Baltimore Sun. In particular, it will look into how these institutions reorder transactions, provide details to customers about those policies, and give them potentially misleading information. The CFPB will also investigate why, under many plans, lower-income and younger consumers tend to pay more fees.
In much the same way that credit card lenders are required to display all account terms within an easy-to-read, jargon-free information box, the CFPB would like to begin requiring banks to provide similar disclosures to consumers who overdraw their accounts, the report said.
Making sure to avoid bank overdrafts is one way for consumers to protect their finances, but they should also take the time to order and review their credit reports periodically. Doing so may help them to determine whether they contain unfair markings that may damage their credit scores.