The U.S. Consumer Financial Protection Bureau (CFPB) is conducting a study to determine if banks are manipulating the system to charge more overdraft fees. Well, duh...

Some of the things I found interesting reading the article about this:

The agency said one area it will focus on is whether banks at the end of each day are processing large transactions first so that they can then charge a customer more overdraft fees for each subsequent smaller bill payment, check or ATM withdrawal.

Having experienced this before, yes they absolutely do (at least my bank does). A few years ago I was suddenly faced with keeping up with my checking account. Something I had not had to do since my late teens since my wife had always handled it. (I quickly learned accounting isn't my strong suite). It didn't take long before I went to withdraw some cash and realized I was hundreds of dollars in the hole due to a small error which turned into multiple items being over-drafted due to this practice.  I will never understand this practice. It's only purpose seems to be so they can charge more fees. Maybe they have a good explanation for why they do this though.


Overdraft practices have the capacity to inflict serious economic harm on the people who can least afford it," CFPB Director Richard Cordray said in a statement. "We want to learn how consumers are affected, and how well they are able to anticipate and avoid paying penalty fees.

Yes, they most certainly do. Luckily, I was able to make up for the large hole I found myself in pretty quickly, others may not be able to do so. When you're living on limited income and make a mistake I'm sure it's devastating.  As for being able to anticipate fees, the best way to do this is to properly keep up with your ledger in the first place, but the banks do share some of the blame. It's almost impossible to keep up with your account using only the bank's online or smartphone apps. Sometimes it will take days for a debit to show up and I never can figure out if the balance I'm looking at is what's actually in there, or what's in there minus the stuff that's pending (it seems to vary. I think I might need to find a more reliable bank).

While there's no doubt the best way to avoid over-draft fees is to keep an accurate ledger of your debits and deposits (and I realize some people intentionally overdraft their accounts when they're in a pinch), it would be nice if the banks didn't completely rake their customers over the coals when they over-draft their accounts by a few cents. The practice of deducting debits from largest to smallest at the end of the day is, in my humble opinion, completely unethical. How hard is it to deduct our debits as they are received? In this day and age when just about every transaction we make is time stamped, doesn't seem like that would be too difficult. Or maybe we should start keeping up with our ledgers that way. Each day sit down and write down our debits from largest to smallest. Doesn't seem very practical to me.

What do you think??