Jan. 25, 2007 

The Center for Responsible Lending, a nonprofit that focuses on lending practices, reported today the results of their study which found that the median overdraft charge is now $31 to $34—higher than the $27.40 industry average estimated last October by Bankrate.com.

Point-of-sale debit-card purchases at stores, gas stations and restaurants, usually involving the swiping of cards through machines, are the most costly form of overdraft, triggering $2.17 of fees per dollar overdrawn, the CRL study shows.   

That compares with 86 cents of fees per dollar overdrawn via checks, and 74 cents per dollar overdrawn via automated teller machine withdrawals, according to the study.

The study was issued on the same day the U.S. Senate Banking Committee heard testimony urging that Congress limit fees that credit card issuers, including many banks, impose.

Overdraft fees, a variant of the "bounce protection" common on checking accounts, are growing as consumers rely more on debit cards and banks depend more on fees as a tough interest-rate environment crimps lending income.

In a 2005 study, the CRL estimated that overdrafts cost checking account customers more than $10.3 billion a year.  Meanwhile, Federal Reserve data show that point-of-sale debit card use has grown more than 20 percent a year since 1996.

The CRL study found that two of three consumers who had an opinion would prefer that banks not charge overdraft fees, but simply deny transactions that would overdraw accounts.