Putting your money under your mattress may seem more attractive after reading a report
OSPIRG released last week on all the ways Oregon banks nickel and dime consumers.
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.
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.
"If you think you've got a free or low cost checking account, you might be surprised to learn that you are subject to a long list of poorly disclosed, sometimes outright deceptive fees and policies that can really add up," says OSPIRG Consumer Advocate Matt Wallace, who wrote the report.
OSPIRG is working with U.S. Sen. Jeff Merkley (D-Ore.) to support federal legislation that would establish a new agency to protect consumers against predatory financial practices.
"We need a full time cop on the beat to protect consumers in a dangerous financial world," Wallace says. " The proposed Consumer Financial Protection Agency being debated in Congress right now could not only protect consumers from the kinds of tricks and traps outlined in [OSPIRG's] report, it would have the authority and flexibility to protect consumers from the tricks and traps the big banks haven't invented yet."