The Greenlining Institute in Berkeley is a non-profit focusing on economic development in low income and minority neighborhoods. It says bank customers nationwide paid $23.7 billion in overdraft fees last year. That's a big chunk of change banks aren't going to give up easily.
New regulations require you to opt in to overdraft protection plans. But some customers who choose not to do that are being met with resistance from banks.
Preeti Vissa authored the report on debit card overdraft fees for the Greenlining Institute in Berkeley.
"It's been told in a way that can scare a consumer into staying into that overdraft protection," she said.
Vissa says the new regulations are a good step, but says they need to go further to protect consumers from expensive fees.
"It really has very little to say about how much a consumer is still charged," she said. "And it also has very little to say about how a bank needs to inform the consumers about their overdraft policies."
But the California Bankers Association says overdraft protection plans are "highly valued by customers" because it "saves consumers additional fees." Its survey found 96 percent of those who had to use it are glad payments are covered.
In the meantime, a class action lawsuit is expected to be heard in federal court beginning Monday against San Francisco-based Wells Fargo Bank.
The suit alleges the bank flip-flops the order of debit card usage, putting higher transactions ahead of smaller ones. And that leads to overdraft fees being charged on transactions that didn't leave the customer overdrawn.
"So the end result of this is that $3.50 cup of coffee at McDonald's, I guess it's a little more than coffee, there's added a $35 overdraft fee to that?" attorney Richard McCune
Wells Fargo Bank says it disagrees with the allegations. It believes the way Wells Fargo processes transactions is appropriate and it will vigorously defend this case.