Effective June 27, Fifth Third customers will pay a charge of $37 per overdraft for each overdraw after the first one in a given year. The initial overdraft transaction in a 12-month period has a $25 fee, according to Fifth Third.
Cincinnati-based Fifth Third will drop fees that add $8 per day after an overdraft remains unpaid for three days.
That replaces the current policy of charging a $25 fee for the first overdraft, a $33 fee for the second, third, and fourth overdrafts, and a $37 fee for the fifth or more overdraft in the same 12-month time period, according to a survey of big bank fees released Thursday by Consumer Federation of America.
U.S. Bank’s new policy effective June 29 is for customers to pay a $15 fee for an overdraft transaction of $15 or less, and $35 on any overdraft over that amount. As it is, U.S. Bank charges $10 if the overdraft is $20 or less, and $33 per item for overdrafts of more than $20, according to Consumer Federation.
The fee change comes from an overall review of deposit fees, said U.S. Bank spokeswoman Nicole Garrison-Sprenger.
“We offer a lower fee for overdrafts caused by small dollar transactions and we don’t charge a fee if the account is overdrawn less than $10,” Garrison-Sprenger stated. “We have numerous features that help consumers manage their accounts and avoid fees, including email and mobile alerts, and automatic transfer of funds from a savings or other account to avoid encountering a negative balance.”
Overdraft fees are the most expensive form of credit the banks extend and it’s typically paid by lower-income consumers having trouble making ends meet, said Jean Ann Fox, director of financial services for the consumer federation.
“We think all of these fees are too high. There’s no reasonable and proportional amount to what consumers are borrowing when they overdraft and what the banks are charging them,” Fox said.
Contact this reporter at (513) 705-2551 or clevingston@coxohio.com.
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