WASHINGTON -- Consumer activist Ralph Nader said banks charge too much for bounced checks and urged legislators to restrict the time banks hold funds while clearing checks.

"The fees that banks are charging are unconscionable," Mr. Nader said, adding that consumers should fight back against "the well-heeled American Bankers Association and the ever-consolidating banks" by forming associations to represent their interests.

Mr. Nader and his organization, the Center for Study of Responsive Law, said banks charge $15 to $20 for bad checks but incur administrative costs of only $1.36.

Industry representatives said those numbers miss the point.

"It's like a parking ticket," said Nessa Feddis, a lawyer with the American Bankers Association. "The cost of issuing the ticket is nothing like the fee that is charged.

"But the fee is intended to discourage people from writing overdrafts," Ms. Feddis added.

Janice Shields, a researcher for Mr. Nader's group, said banks can no longer cite fraud losses as a reason for long check clearing times or high fees for overdrafts.

"Fraud losses are less than 18% of the combined fees collected from writers and depositors of bounced checks," she said.

But Marcia Sullivan, vice president and director of government relations at the Consumer Bankers Association, said losses from fraud are a matter of rising concern.

"Local checks now must be cleared in one intervening day," she said. "And fraud losses are pretty high."

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