As the controversy surrounding overdraft fees continues, a recent report found that banks and credit unions are not stopping the practice.

According to a new report from The Pew Charitable Trusts, 84 percent of banks charge overdraft fees for debit card transactions.

Despite a 2010 federal law mandating that banks provide an opt-in option and disclosure explanation to consumers explaining overdraft fees, the 2014 Pew report showed that the majority of customers were shocked to learn that they were being charged for overdrawing their checking accounts.

Credit unions have reportedly been practicing similar methods, with many customers complaining that the credit unions are becoming just as bad as banks.

While both banks and credit unions have reportedly become better at disclosing the overdraft fees, customers are still affected.

An overdraft fee is a fee that a credit union, bank, or other financial institution charges a customer when money is moved to their checking account in order to pay for a transaction.

The transfer may be from a linked money market, checking account, or even a loan made by the financial institution. In return for covering the transaction, the financial institution imposes the overdraft fee.

Overview of Credit Union Overdraft Charge Allegations

Credit unions such as Patelco Credit Union (Pleasanton, CA), United Nations Federal Credit Union (Long Island City, NY), Wings Financial Credit Union (Apple Valley, MN), Ent Federal Credit Union (Colorado Springs, CO), and Hudson Valley Federal Credit Union (Poughkeepsie, NY) have gained popularity over the years due to lower fees and better customer service.

Unfortunately, these alternative financial institutions felt the crunch of the recession and started raising overdraft fees in response to economic pressure.

Customers have also been reporting that their credit unions processed their transactions out of order, in order to maximize the overdraft fees they could collect.

According to the Pew report, the median overdraft penalty is currently $35 for major banks, which was the same as it was in 2013. Furthermore, nearly 60 percent of banks charge an extended fee if an overdraft charge is not paid off by a designated deadline.

A recent report from the Consumer Financial Protection Bureau shows customers had paid more than $34 billion in service charges in 2012, with 61 percent of the charges pertaining to overdraft fees or other non-sufficient fund reasons.

Experts advise consumers to seek out legal advice if they feel that a bank or credit union has imposed improper fees or if their funds have been mistreated.

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