Many banks are still processing at least some checking account transactions from largest to smallest, possibly triggering more in overdraft fees for customers, a new survey found.
The banks continuing this practice for at least one transaction type include Bank of America (BAC), Capital One Financial (COF), Fifth Third Bancorp (FITB), HSBC Holdings (HSBC), JPMorgan Chase (JPM), PNC Financial Services (PNC), RBS Citizens, Regions Financial (RF), SunTrust Banks (STI), and Wells Fargo (WFC), the Consumer Federation of America said Thursday.
Dozens of banks have been sued over allegedly reordering debit card transactions to maximize overdraft fees. So far more than a dozen banks have reached settlements in these cases.
In May, the Consumer Federation, an association of almost 300 nonprofit consumer groups, surveyed the websites of the 14 largest banks and collected information on their overdraft fees and practices.
The survey found that there was more variety in the order that transactions were processed based on the type of transaction. For example, some banks processed time-stamped transactions in the order received then other transactions largest to smallest.
The median overdraft fee remained unchanged at $35 for the third year while initial fees ranged from $33 to $37.
Four banks — Fifth Third, PNC, RBS Citizens and SunTrust — charge tiered fees based on how many overdrafts are incurred in a 12-month period while U.S. Bancorp (USB) charges tiered fees that vary depending on the size of the overdraft. SunTrust said earlier this week it was doing away with its fee break for first-time overdrafts.
The report found that almost two-thirds of banks surveyed add on second or per-day fees if consumers do not repay the overdrafts immediately. For example, SunTrust charges $36 on the seventh day an overdraft remains unpaid while Bank of America adds a second $35 fee if unpaid in five days.
Only three large banks, Bank of America, Citigroup (NYSE:C) and HSBC, do not allow customers to incur overdraft fees while using their debit cards to make purchases. Citigroup and HSBC also do not permit fees to be triggered at an ATM.
