how to avoid nsf fees
many banks now allow you to set up low balance alerts you get a text or email notification when the funds in your account drop below a figure you designate that can help you keep track of how much money is currently available and you can adjust your spending accordingly criticism of nsf feesthe cfpb oversees and protects consumers while using financial services in 2010 sweeping bank reform laws addressed overdraft and nsf fees and implemented guidance allowing consumers to opt for overdraft protection through their banks more protections for consumers become increasingly urgent as financial institutions mishandle fee policies 3financial institutions have reordered transactions processing debits to consumer accounts in a way to maximize overdraft fees by deducting the largest first rather than in chronological order in 2011 bank of america settled a two year old class action for 410 million for reordering customer transactions and charging overdraft fees in this way td bank paid over 62 million in a class action settlement for the same mismanagement of fees in 2010 4in 2020 the bank of hawaii set up a settlement fund of 8 million to repay clients who had been charged for authorized customer payments while funds were available but settled the debits once the accounts moved to an insufficient status and charging fees the bank agreed to forgive overdraft fees that remained unpaid 5financial institutions have practiced single transaction multiple fee activity assessing more than one nsf fee on a single item or transaction if the payment request is automatically re submitted repeatedly by the creditor in 2020 the navy federal credit union settled such a case for 16 million without conceding any wrongdoing or liability 6this was followed by the 2023 cfpb report that found a number of banks and credit unions had engaged in similar actions as navy federal the institutions then said they would reimburse wronged consumers and issued plans to stop charging any nsf fees 2frequently asked questions