Read as much as you want on BostonGlobe.com, anywhere and anytime, for just 99¢.

Consumer watchdog to start overdraft inquiry

WASHINGTON - The Consumer Financial Protection Bureau is expected to launch an inquiry today into banks’ overdraft practices, which have been in regulatory cross hairs in recent years.

The bureau said it will look into whether banks are reordering customers’ debit-card charges to maximize overdraft fees. Reordering transactions can double or triple penalties, and the practice has been the target of several class-action lawsuits against the nation’s biggest banks.

Continue reading below

The inquiry also will focus on bank overdraft policies, how they market the plans, and their impact on low-income and young consumers.

Overdraft fees have long irked consumers, who have complained that withdrawals of as little as $3 from their bank accounts have resulted in penalties as high as $37. As the recession squeezed Americans’ budgets and anger at the financial industry reached fever pitch, regulators and lawmakers began moving to curtail banks’ fees.

One thing regulators left unaddressed, however, was the order that banks processed charges. That issue has been winding its way through the nation’s court system instead.

Loading comments...
Subscriber Log In

You have reached the limit of 5 free articles in a month

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of BostonGlobe.com
Marketing image of BostonGlobe.com