Overdraft sleight-of-hand

New report finds that bank overdraft fees continue to be excessive and confusing. Many banks still use a practice known as "reordering charges" in which large transactions are counted first so that maximum fees can be charged. From the Greenlining Institute report:

Consider a consumer with $50 in her account who makes a debit card purchase of $10 at 10 a.m., a $7.50 purchase at noon the same day, and a $55 purchase at 3 p.m. If the transactions were processed in the order they occurred, only the final purchase would generate an overdraft fee. Reordering allows the bank to process the $55 purchase first and charge three overdraft fees, one for each transaction that day. As a result of the fee structures, the average borrower ends up being charged $1.94 for every $1 that they borrow on overdraft by a debit card purchase.

Apparently, fees can vary a lot, and employees are not always familiar with the rules. Some improvement is likely with a new requirement that allows customers to opt out of overdraft protection. But the Greenlining report notes that banks are still pushing their programs.