So-called junk fees can be tricky.
The Consumer Financial Protection Bureau has been scrutinizing some banking fees, including those for overdrafts and non-sufficient funds, that can catch customers by surprise — and are "likely unfair and unlawful," according to the agency.
The consumer watchdog in the last several months has proposed a rule prohibiting financial institutions from charging certain fees on credit cards and issued guidance on some of the fees that can come with checking accounts. Since then, several banks announced they were eliminating overdraft fees or updating their policies to be more consumer-friendly, the CFPB said.Â
But even though many banks lowered their fees for overdrafts and non-sufficient funds, fees for using an out-of-network ATM jumped to a record high, according to a new report by Bankrate.
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"ATM fees are biting harder than ever," said Greg McBride, Bankrate's chief financial analyst.
The average total fee a customer pays for an out-of-network ATM transaction rose to $4.73, a record high, Bankrate found, based on data from non-interest and interest accounts. This total combines the average fee the out-of-network ATM owner charges, $3.15, with the average fee the customer's own bank charges the customer for the out-of-network transaction, $1.58.
On the upside, overdraft fees and non-sufficient funds fees are now significantly lower. The average overdraft fee fell 11% to $26.61 from last year's average of $29.80, while non-sufficient funds fees hit an all-time low of $19.94, on average, according to Bankrate.
However, few banks have done away with them altogether: 91% of banks still charge overdraft and 70% charge non-sufficient funds fees, Bankrate also found.
Last month, the CFPB ordered Bank of America to pay more than $100 million to its customers and $150 million in penalties for double-dipping on overdraft fees, among other violations.
"Despite recent progress in addressing overdraft fees, the job is far from complete," said Nadine Chabrier, the Center for Responsible Lending's senior policy counsel, in a statement.
Monthly fees can be hard to avoid
While free checking accounts are widely available, many banking customers are encountering monthly service fees and rising balance requirements, Bankrate found.
More than a quarter of checking account holders, or 27%, are regularly hit with fees, which can add up to an average of $24 per month, or $288 per year, according to another survey from Bankrate.Â
The average fee on an interest checking account is typically even higher, while the average yield is just 0.05%.
"Avoid accounts that require stranding a balance to avoid [monthly service] fees when you can get a free checking account and move your excess funds into an online savings account at a time when yields exceed 5%," McBride said. (Here are a few more competitive options worth considering.)
"Consumers can almost always avoid other account fees by using direct deposit, maintaining a minimum balance or limiting the use of ATMs that are not affiliated with their bank," said Mike Townsend, a spokesperson for the American Bankers Association. "If you must use an ATM outside of your bank's network, consider a larger withdrawal to avoid having to go back multiple times or using the free cash-back feature on debit card purchases."
Some banking interest groups countered that offerings such as overdraft protection provide a much-needed safety net.
Without the option of overdraft protection, "people are more likely to turn to predatory lenders, hurting the same people the administration seeks to help," Jim Nussle, president and CEO of the Credit Union National Association, said in a statement.
For more on checking accounts, check out CNBC Select's recent ranking on the best no-fee checking accounts.