Good story on how consumers of venting over overdraft protection:

Most banks and credit unions automatically sign customers up for what they call overdraft “protection,” that allows — rather than blocks — purchases and ATM withdrawals that overdraw their bank accounts. For this service, the institutions charge customers fees ranging from $10 to $38 per overdraft, according to a study released last November by the Federal Deposit Insurance Corp.

Some 86% of banks the FDIC surveyed had overdraft programs in place in 2006, and three-quarters automatically enrolled customers in such programs. The survey also found overdraft fees were most common among young adults, ages 18 to 25, and low-income accounts. A separate analysis from Mike Moebs, who runs Lake Bluff, Ill.-based Moebs Services, a research and consulting firm, shows banks and credit unions earned $36.7 billion in consumer overdraft revenue last year, about three-quarters of their total service charge income.

What are they talking about in this article?  Overdraft fees.   The Payday Pundit has been tell people this from day one, by the way.  The rest of the world is just starting to catch up.

Laconia’s NH Citizen reports:

One fee that will rise at Laconia Savings Bank is the overdraft fee, which is going from $26 to $30.  “It’s not a huge amount, but one of the benefits we hope to is see is that, with a higher fee, people will be less likely to overdraw on their accounts,” Murphy said.

So, consumers in New Hampshire no longer have the option of a $15 per $100 payday loan…but they’ll be forced to pay $30 if they overdraw their account.  Insanity.

What if you don’t have either until payday?  This is where a payday loan would come in handy, but the Fond du Lac Reporter doesn’t even see it as an option.

If your credit is poor and you can’t get a credit card and you rely on debit you can quickly get into trouble

Today, most banks will approve even the smallest debit card purchase — then hit you with a fee of $35 or more.

Yet we don’t hear howling about that kind of predatory lending….

Washington Post columnist Nancy Trejos is skeptical.   From her column today which discusses the recent Federal Reserve proposal to crack down on “deceptive” practices:

“The OTS {Office of Thrift Supervision} and Fed proposal show that these agencies recognize that abusive overdraft loans are a significant problem,” said Eric Halperin, DC director of the Center for Responsible Lending. “However, they would continue to allow banks to enroll customers, who never signed up for it, into the most expensive credit program the bank offers.”

They also urged the agencies to consider banning overdraft fees caused by check holds resulting from a bank’s policy to delay the availability of deposited funds. “These rules should also recognize that it is an unfair practice for a bank to charge an overdraft fee or a bounced check fee for a problem caused by the bank’s decision to place a hold on the consumer’s check deposit,” said Gail Hillebrand, financial services campaign manager of Consumers Union.

The Payday Pundit has been making the point over and over again the payday lending customers are frequently trying to avoid bounced check fees and overdraft protection costs.