After the Federal Reserve mandated that bank overdraft protection programs must be opted into, the choice seemed like a no-brainer to me. If you have insufficient funds to cover what you’re spending, the last thing you need is a $35 fee for every transaction the bank pushes through anyway. Evidently, this logic is lost on a number of banking customers.

Forbes reports that, based on a Consumer Federation of America survey, in the wake of the opt-in requirement, overdraft fees have pretty much stayed the same. In response, the Consumer Financial Protection Bureau (CFPB) announced yesterday a inquiry into bank overdraft fee programs.

As I blogged in November:

A couple of days ago, I discovered in my mailbox one of those thin, shiny, over-sized envelopes from my bank that’s got “raw deal disguised as a favor to you” written all over it. Indeed, it was an offer to opt in to Wells Fargo’s overdraft protection program.

I pretty promptly ripped it into a million little pieces, but not before noting the big selling point: “It’s Free!” Truth be told, back in the day when I had no choice but to have overdraft protection, it turned out to be the most costly customer service I’ve ever had. At the time I was barely making ends meet and overdraft “protection” ended up costing me hundreds of dollars in overdraft fees each year.

Why opt into bank overdraft protection at all? Granted, there are important payments you cannot afford to miss – for your rent or an auto loan, for example – but aren’t you much better-served calling your landlord or lender and letting them know you’re going to be a couple of days late? Even if you’re charged a fee, it’s doubtful that fee is more than the one charged for an overdraft.

All of this begs the question: What is prompting banking customers to opt-in to overdraft protection programs? How are these program being promoted and what are the terms customers are being provided with? The CFPB inquiry is aimed at determining just that, starting tonight in a town hall meeting at Hunter College. If you would like to participate, RSVP at www.cfpb.events@cfpb.gov.

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