The federal agency will gather the essential inputs to determine either the banks are manipulating the system to goose fees or they are clearly mentioning the customers as how they can incur overdraft charges.
The watch dog has received a complaint from the US Consumer advocate groups against banks about charging absorbitant fees nearly $35, if their account got overdraw with a small purchases such as a cup of coffee.
Thus, the banks are swallowing nearly $30bn annually of consumers’ hard earned money, over the past few years.
Approximately $37.1bn was collected as overdraft fees in 2009, which has reduced about 20% to $29.5bn in 2011, according to the research firm Moebs Services.
CFPB director Richard Cordray said overdraft practices have the capacity to inflict serious economic harm on the people who can least afford it.
"We want to learn how consumers are affected, and how well they are able to anticipate and avoid paying penalty fees," Cordray added.
The agency said it will seek information directly from large banks, though it did not name the institutions, and is also putting out a request for input from the public.
