Many consumers who took out online payday loans are now facing an unexpected, additional expense – fees charged by their financial institution when a lender's attempt to collect loan repayment fails, the CFPB said in a new report.
Half of online borrowers received an average of $185 in bank penalties because at least one debit attempt failed, the agency found in an 18-month study of 330 lenders that made loans in 2011 and 2012.
Borrowers may be required to pay an overdraft fee, which the CFPB said typically totaled $34 at banks in 2012. However, a recent report from Moebs $ervices showed the average overdraft fee at credit unions now stands at $29, compared to $30 at banks.
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