Consumers Feeling the Pinch of New Banking Fees

CEEL Reminds Consumers to 'Read Fine Print,' Releases Survey Showcasing
Overwhelming Need for More Economic and Financial Education

WASHINGTON, July 13/PRNewswire-USNewswire/ -- Data from the federal government
estimates that U.S. banks will collect more than $38 billion in fees this year
from consumers who overdraw their checking accounts. Banks will collect
billions more from other account penalties, including credit card late fees.
Moebs Services, which collected the information, reports that the average
overdraft fee has risen to $27.50 this year, up from $25 last year. A 2008
study from the Federal Deposit Insurance Corp. found that insufficient funds
and overdraft fees account for 74 percent of consumer bank service charges.

A 2008 study from Bankrate.com showed an increase of 2.5 percent in bounced
check fees from the year before, up to nearly $30. Additionally, the average
ATM fee has risen to nearly $2, an increase of more than 10 percent in one
year. The average amount American consumers have to keep in their checking
accounts to avoid paying monthly account fees was also up 4 percent from the
year before, to more than $3,400.

With all of these changes, consumers are feeling the pinch and the Federal
Reserve is looking at additional regulations. The Center for Economic and
Entrepreneurial Literacy (CEEL) reminds consumers that financial forethought
can help lessen the sting.

"Economic illiteracy is at the heart of our current economic crisis," said
James Bowers, managing director for CEEL. "As banks continue to raise account
and overdraft fees, it is more important than ever to read the fine print,
create (and stick to) a family budget and learn all the facts before taking on
new financial burdens, like opening a credit card account or purchasing a car.
Unfortunately, CEEL's recent survey shows that many Americans don't understand
basic facts about economics and many don't have the tools to manage their
personal finances."

A December 2008 study from CEEL highlights the need for increased education on
personal finance and economic issues. The national survey showed that a
disturbing number of Americans are unable to answer simple questions about
borrowing, interest rates and even basic math. Many respondents also admitted
to making poor decisions with their own finances.

Highlights from the survey include:
-- 54% of respondents could not identify what a subprime mortgage was.
-- 56% of respondents could not identify FICO score as the most important
factor in getting a loan.
-- 65% of respondents could not identify what would remain if you
subtracted 25% from 8. One in three respondents could not identify
what
1% of 50,000 was.
-- 75% did not know that when in need of short-term emergency cash,
bouncing a check costs more than wire transfers, credit card advances,
and short-term payday loans.
-- Half of respondents have overdrafted their checking account at one
time,
while a third of respondents have paid a bill late in the past year.

-- More details can be found at www.econ4u.org

"It is clear that we need to increase personal finance education at all ages
so we have better informed employees, borrowers, and voters," continued James
Bowers.

This press release presents the findings of a telephone survey conducted by
Opinion Research Corporation among 1,004 adults living in private households
in the continental United States.

Find more fast facts about personal finance and take our economics quizzes at
www.Econ4U.org

SOURCE Center for Economic and Entrepreneurial Literacy

Allison Miller, for the Center for Economic and Entrepreneurial Literacy,
+1-202-420-7878