That “Free” Checking Account

The Willamette Week blogs about an OSPRIG report about “free checking” in Oregon.

Here are two alarming facts the consumer protection group discovered in a survey of 10 banks and eight credit unions offering “low cost” checking accounts in Portland, Eugene and Ashland:

An overdraft of $20 paid back in two weeks amounts to a loan with an Annual Percentage Rate of 3889%, more than 7 times higher than what was common in the payday lending industry before Oregon established effective regulations in that market.

and

A typical customer who incurs a modest number of the different fees outlined above could pay an average of $166.24 in fees every year simply to maintain a regular checking account. This ranged from an average of $132.95/year for the credit unions surveyed to an average of $184.24/year for the banks surveyed.