NCHelp.org has an article that you all should read.  It appears that many banks are targetting college students with higher fees and using deliberate practices to increase the amount of assessments.  Read the article below, you don’t want to miss this!

Report Concludes Overdraft Fees Draining Bank Accounts of College Students

The Center for Responsible Lending, a non-profit research group issued a report last week entitled “Billion Dollar Deal” that analyzes the impact of overdraft fees on the bank accounts of college students. The report states that banks use “abusive” overdraft loans to collect nearly $1 billion per year in fees from young adults and that some universities are contributing to the problem by granting a single bank exclusive marketing privileges on campus.

The report was conducted to review the trend of increased debit card use among college students 18-24 and the increased use of “abusive” overdraft practices among major banks. Concerning methodology, the report analyzed the checking account transactions of 18- to 24-year-old account holders spanning an 18-month period, using data from a consumer tracking panel.

Major findings from the report include:

• Banks use “abusive” overdraft loans to collect nearly $1 billion per year in fees from young adults who earn relatively little as students or new members of the workforce;
• Debit card point-of-sale (POS) transactions are the leading cause of overdraft loans for young adults; and
• Young adults pay more than $3 for every $1 borrowed for debit card overdrafts.

As detailed in the report, The Center recommends the following to help curb overdraft practices they deem “abusive”:

• To avoid putting their students’ financial welfare at risk, universities should not partner with banks that make abusive overdraft loans.
• Young adults should choose a bank that does not make abusive overdraft loans and that will link their checking account to their savings account or a less expensive line of credit for back-up funds.
• Prohibit banks and credit unions from manipulating the order of check clearing or delaying the posting of deposits if doing so results in overdrafts;
• Require banks and credit unions to obtain written consent from customers in order to enroll them in high-cost overdraft loan programs;
• Require banks and credit unions to comply with the Truth in Lending Act for high-cost overdraft loans by disclosing their cost in terms of annual percentage rate, among other policy recommendations.

To address the issue of abusive overdraft fees, Representative Carolyn Maloney (D-NY) has introduced H.R. 946, “The Consumer Overdraft Protection Fair Practices Act.” A mark-up of the bill is expected today in the House Financial Services Committee.

For more information, the related press release issued by The Center is included in the expanded version of today’s Daily Briefing.