Overdraft fees big bucks for big banks

NEW YORK — The country’s largest banks have increased the amount they collect from customers in overdraft fees, according to new government data, just as regulators are considering whether to issue rules that would rein in their use.

Wells Fargo saw the biggest increase, 14 percent, in the amount collected in overdraft fees during the first quarter, while the levies grew 6 percent for Bank of America and JPMorgan Chase, the country’s largest bank. The amount collected by the more than 600 banks included in the Federal Deposit Insurance Corporation data jumped 6 percent to $2.7 billion overall.

The FDIC began collecting data on overdraft fees just last year and banking industry officials note that the increase may just be a blip or simply reflect that they have more customers.

But the rise comes as the Consumer Financial Protection Bureau is researching how banks levy overdraft fees on customers who bounce checks or withdraw more than they have in their accounts using debit cards or automated teller machines. Earlier this year, the agency asked the country’s largest banks to offer accounts that do not charge overdraft fees.

“Over the years, overdraft programs have become a significant source of industry revenues, and a significant reason why many consumers incur negative balances,” CFPB Director Richard Cordray said in a February hearing. “Too many problems with overdrafts can cause people to give up on the banking system or force them out of it altogether.” The agency is preparing to issue an outline of potential rules later this year.

Regulators have targeted overdraft fees before. In 2010, regulators forced banks to get consent before charging customers fees for ATM and debit card transactions that exceed their accounts. The change cost banks billions, according to industry officials, but consumer advocates say overdraft fees continue to impose heavy costs on the poor.