Banks are aggressively marketing a new form of high cost credit intended to boost their fee income at the expense of the most vulnerable consumers. These products are based on overdraft protection, but are not traditional overdraft lines of credit or the occasional ad hoc practice where a bank will cover a consumer’s bounced check as a courtesy. Instead, they are deliberate, systemic attempts to hook consumers onto overdrafts as a form of high-cost credit.
In this report, advocates at the Consumer Federation of America and National Consumer Law Center examine how banks and their consultants aggressively market bounce protection plans to consumers as a form of credit that the consumers can draw upon.
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