CHICAGO (8/6/14)--Big-bank branches' explanations of overdraft programs can be inconsistent and unclear according to a report published by the Woodstock Institute, a nonprofit research and policy organization. The report cites 64 mystery shopping visits at 39 bank branches in Chicago; Durham, N.C.; New York City and Oakland, Calif.
Through the visits to branches, the study found:
The four organizations that participated--Woodstock, the California Reinvestment Coalition, the New Economy Project and Reinvestment Partners--made several recommendations to federal banking regulators and the Consumer Financial Protection Bureau (CFPB). These include limiting overdraft fees, prohibiting financial incentives to employees for sale of overdraft products and creating a uniform standard for verbally describing overdraft products and fees.
The organizations visited branches of the four largest banks by deposit size in their respective states, which included Bank of America, BB&T, Capital One, Citibank, JPMorganChase and Wells Fargo, among others.
A July CFPB report on overdraft data found that overdraft and non-sufficient funds fees make up the majority of checking account fees incurred by consumers, approximately 75% of total fees paid by opted-in consumers, averaging more than $250 per year.