Have your bank fees shot up lately?
Many bank fees have risen in recent years and banks are failing to provide consumers with information about these fees, a report released last week by the Government Accountability Office found. Federal regulations require these details to be made available to consumers.
Average bank fees have risen by 10 percent or more since 2000, the GAO report states. Overdraft fees increased 11 percent between 2000 and 2007.
In 2003, banks began to routinely allow debit card charges to go through,
even though consumers didn’t have enough money to cover them. Charges were accessed, and consumers often weren’t informed about the charges, usually about $30.
In 2006, consumers paid more than $36 billion in fees associated with checking and savings accounts at banks, thrift institutions, and credit unions.
GAO staff made undercover visits to 185 branches of 154 banks, thrift institutions, and credit unions. They were unable to obtain detailed fee information and account terms at more than 20 percent of the institutions. The Web sites of all of the institutions that were examined by GAO staff were checked, and detailed fee information wasn’t available on more than half of the sites.
An interesting trend was uncovered by the GAO investigators in bank fees over the past six years –- the lower the interest rate set by the Federal Reserve, the higher the fees charged by the banks.
When banks made less money on interest, they increased bank fees to consumers, the GAO reported
Federal banking regulators need to find out how often consumers receive disclosures on fees and account terms before opening an account, the report states. It also recommends that regulators include steps in their oversight to make sure that disclosures continue to be made available to consumers.
Rep. Carolyn B. Maloney, D-N.Y., chair of the congressional Subcommittee on Financial Institutions and Consumer Credit, requested the report.
Maloney is spearheading legislation, H.R. 946, which would crack down on abusive overdraft fees and equip bank customers with more control and information about overdraft fees.
