Consumers Using Overdraft Coverage Risk Higher Fees, U.S. Says

Consumers who choose bank overdraft coverage are more likely to pay hundreds of dollars in fees each year and have their checking accounts closed than those who decline it, the U.S. Consumer Financial Protection Bureau concluded in a study released today.

“We are concerned that some overdraft practices may increase consumer costs beyond reasonable expectations,” Richard Cordray, the agency’s director, said in an e-mailed statement. “What is marketed as overdraft protection can, in some instances, create greater risk of consumer harm.”