WASHINGTON — A recent report from the FDIC on the frequency and impact of fees on overdrawn checking accounts laid the blame on debit and/or ATM cards for the majority of overdrawn accounts nationwide.
"The FDIC Study of Bank Overdraft Programs" found that 48.8% of all report NSF transactions happened at POS/debit terminals (41%) and the ATM machines (7.8%). By comparison, checks only accounted for 30% of reported overdrafts.
The median dollar amount of all 22.5 million transactions processed by the micro-data banks with automated overdraft programs was $36 POS, the report said. Debit card transactions were not only the most frequent source of overdrafts but also the source of the smallest amounts that trigger the overdraft. According to the report, the median dollar value of transactions that caused overdrafts was $20.
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"With a $27 overdraft fee, a customer repaying a $20 POS/debit overdraft in two weeks would incur an APR of 3,520%," the report said. "A customer repaying a $60 ATM overdraft in two weeks would incur an APR of 1,173%; and a customer repaying a $66 check overdraft in two weeks would incur an APR of 1,067%."
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