CFPB Fines Bank of America What That Means For You

Tue, July 25, 2023

The Consumer Financial Protection Bureau on July 11 fined Bank of America for three types of transgressions against its customers, each costing consumers money and time. We've seen similar transgressions at many other banks over the years, and we are likely to see more in the future.

Here are a few simple steps consumers can take to help them avoid being victimized by their banks.

Avoid NSF/Overdraft Fees

The first BofA transgression cited by the CFPB involved non-sufficient funds (NSF) fees. An NSF fee occurs when there's not enough in an account to cover a transaction. Banks will typically decline a transaction because of insufficient funds and charge the customer an NSF fee.

The problem with what BofA did wasn't that it charged an NSF fee, but that is charged multiple NSF fees for the same transaction. BofA's NSF fee was $35. When this charge was unfairly applied multiple times, the total fee amount quickly rose to a burdensome level.

NSF charges and overdraft charges — the fee applied when an account is overdrawn and the bank covers the transaction charge on the customer's behalf — are common fees at banks.

The good news is that many banks, including BofA, have made their NSF/overdraft fee policies more consumer friendly in the last few years. So if you make a mistake by not having enough in your account to cover a transaction, the fees shouldn't be as costly as what BofA customers experienced. Nevertheless, NSF/overdraft fees can still be costly, and it's important to avoid them.

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/cfpb-fines-bank-america-means-172224126.html