Should Banks Be Required To Ask Permission For Overdrafts?

When you sign up for a checking account, most banks automatically enroll you in a “courtesy overdraft protection” program. This program means that the bank will approve overdrafts from your ATM or debit card — and charge you a $35 fee for each transaction, etc. But what if you don’t want the service? Well, the Federal Reserve has proposed a new regulation that will require banks to ask your permission before they sign you up.

The Center for Responsible Lending says:

Banks should simply not be allowed to enroll their customers-without their permission-in systems that approve overdrafts without warning, and that artificially increase the number of $35 fees the banks’ can charge for a shortfall. This practice is out of control. It is costing working people big chunks of their hard-earned income.

The “gotcha” practices that banks are using to inflate overdraft fees are not acceptable.

If you’d like to tell the Fed what you think of the proposal, you can email your public comments to regs.comments@federalreserve.gov include in the subject “Docket No. R-1343.” You can also use this form, provided by the Center for Responsible Lending. Remember that your comments will be public.

No Gotcha Fees [Center for Responsible Lending via CL&P Blog]

(Photo: Ryan McFarland, Kevin Dean)

Comments

Edit Your Comment

  1. Jim Topoleski says:

    It made sense back in the days of checks, because back then overdraft fees where almost always cheaper than the bounced check fee you got from businesses.

    But debit cards have made much of this extinct.

    • Ash78 ain't got time to bleed says:

      @Jim Topoleski: Bingo.

      And bank fees are like the government collecting taxes. Once it’s been in place for a little while, it becomes an entitlement.

      • Bladefist says:

        @Ash78: How else do they make money off people who have less then a $1000 in their account at one time?

        Are they to process all your transactions, pay your bills (and the postal fees), and make your atm cards, all for the 2% they make off the $3 in your account?

        It’s absurd. If I owned a bank, and this bill passes, I would close every account that had less then $1000 balance and tell them go #$@$ themselves and hide their money in a tin can.

        • teh says:

          @Bladefist: This is why some banks charge fees for having a low balance. The overdraft fee is not a good (or honest) way to recover that cost.

          • Bladefist says:

            @teh: Then it costs money for all poor people, whereas the overdraft fee just costs money for the irresponsible poor people.

        • snowburnt says:

          @Bladefist My bank has an overdraft protection program where you pay them 35 a month and if you go under they automatically transfer from another one of your accounts and charge you and additional $5 for each occurrence. This is what I call highway robbery

        • Snarkysnake says:

          @Bladefist:

          “It’s absurd. If I owned a bank, and this bill passes, I would close every account that had less then $1000 balance and tell them go #$@$ themselves and hide their money in a tin can.”

          And if I owned a bank,I would piss all of my depositors (and shareholders)money away on those same poor people (that I just ran off) by making them a risky,poorly secured loan on a home that they should be renting and then I would go to the nearest Republican administration and demand that they stick a lot of those same poor people that pay taxes with the bill while I give myself a bonus right before I am sold to an equally broke and poorly run bank. That’s what I would do.

          Too bad I didn’t think of it first.

        • Ash78 ain't got time to bleed says:

          @Bladefist: They’ve already got fees in place for bill pay and check ordering, for example. And accounts under $1,000 usually pay no interest.

          So I’m just a fan of continuing to provide disincentives to keeping small balances in the account. What the bank gets in exchange is free funds (most people over $1,000 are at least earning 0.5%, or more).

          But like I mentioned, that would require a complete reset of the current system. Since every bank now charges overdrafts, it’s a competitive norm. I’d just like to see some small bank step up and pull a Southwest Airlines on us. Cut back the fees and offer no-frills service.

          • Bladefist says:

            @Ash78 I too would love that! Just dont mandate it.

          • Bladefist says:

            @Ash78: I’m just saying, the dip shits in congress don’t know how to run their business better then they do. When Government runs businesses (Fannie, Freddie) shit goes down in a steaming pile

            • Ash78 ain't got time to bleed says:

              @Bladefist: Congress doesn’t know how to run just about any business. It’s full of lifetime, career politicians these days. Or, at best, a bunch of attorneys.

              We need more Ross Perots in our legislature–not that he’d be great as president (well maybe now, with hindsight), but people who actually have a track record of running a business in more than just a token position.

            • NightSteel says:

              @Bladefist: I have to say, government run businesses don’t exactly have the monopoly on shit going down in steaming piles. I think the depression illustrates handily that businesses don’t know how to run themselves any better than government does.

              Not that that’s praise of the government or anything..

          • SynMonger says:

            @Ash78: Online banks do a bit of that. No branch overhead and whatnot, in exchange for higher interest rates on savings, and *gasp* interest on checking, even on low balances.

        • supercereal says:

          @Bladefist: I’ll go out on a limb and be “that guy” who agrees with Bladefist. A bank isn’t a charity, and they’re not in business to look out for your best interests. As such, why should they be responsible if you try to use more money than you actually have? It seems to me that that’s what credit, not a bank account, is for.

          • Dyscord says:

            @supercereal: Not everyone who goes into overdraft are “irresponsible”. My last bank would constantly reorder transactions to make it seem that I overdrafted my account and then a month later they would charge a fee for how many days the account was overdrawn (This in addition to the overdraft fee). This added fee would usually be charged on a different day around the end of each month which would cause the account to overdraft again. It was a huge cycle.

            There isn’t a real reason for overdraft “protection” other than a way for banks to make money off of you. Especially considering that 1) it doesn’t protect you from anything and 2) if you don’t have it then you can’t go over your balance, which to me sounds more like protection.

          • Mina_da_mad_child says:

            @supercereal: Funny, I have an account at TD Bank (formerly Commerce), they don’t impose automatic overdraft fees and I believe they are profitable. Through my own negligence, I was overdrawn on my account for the first time, ever. Instead of slapping on onerous fees, I was told that it is their policy to not charge fees for debit card transactions that put customers in the negative. It was their practice to NOT charge a fee. That and their stellar customer service will do more for their profits than the underhanded, poorly run institutions (BoA, I’m talking about you)

            • mepoochkey says:

              @Mina_da_mad_child: I have a TD Banknorth account and when EZPass screwed up and auto withdrew my monthly payment to them twice in one month, and I was overdrawn, I received numerous fees.

              They must like you better.

          • mepoochkey says:

            @supercereal: Why can’t my debit card just be declined if there’s not enough money in my account — the same way my credit card gets declined if my purchase would put me over my limit?

        • Corporate_guy says:

          @Bladefist: And when you ban low dollar accounts the government will just pull your FDIC insurance. Then we will see how much money you make.

  2. exconsumer9 says:

    Absolutely Yes. Automatic overdraft enrollment exists solely to confuse and mislead customers to incur charges.

  3. Trai_Dep says:

    It’s mind-boggling that they have to pass a law to make banks ask customers for this “feature”.

    • Bladefist says:

      @Trai_Dep: Next year you’ll be on consumerist writing more witty comments about how bad banks are when they lay off half their staff because of the loss of revenue, and how the greedy CEOs stopped offering you free checking.

      Let me guess, every American is entitled to a bank account with no fees, no gotchas, no revenue for the bank.

      • valarmorghulis says:

        @Bladefist: Pretty much with the “no gotchas” part. If they are trying to trick me into giving them money, they should be qualified as scam artists.

        Yes they should be able to charge fees, yes they should be able to generate revenue. If the only way though is to trick their customers though, then they shouldn’t be in business.

      • teh says:

        @Bladefist: No! That is not the point. Free checking has nothing to do with the overdraft fee. Those are two different issues. Quit trolling. The consmerist has no problem with banks charging honest, upfront fees. The consumerist just has a problem with banks sneaking these charges onto unwitting customers.

        • Bladefist says:

          @teh: Is it really sneaking? Who doesn’t know about overdraft fees? I’m not trolling.

          • couldberunning says:

            @Bladefist:

            So should a 1.00 over be charged $35.00?

            I think it should be a percentage based penalty instead of one flat sum with say a max of 35.00.

            You must work for a bank based on your comments.

            • Bladefist says:

              @couldberunning: I don’t know. The bank is a business and should make its own fees. And competition can drive customers to another bank.

              I don’t work for a bank. I just don’t want to bail anymore out. It’s common sense. They make money from those fees. You take that ability away, they have to make it back somewhere else or close their doors.

              • NightSteel says:

                @Bladefist:

                I honestly don’t see the problem with big banks having to close their doors. That’s the vaunted free market at work, isn’t it? Smaller organizations will step in to pick up the slack.

                The problem isn’t that the banks are in financial trouble. The problem is that our government is pouring our money into them in response, instead of letting someone else step up, someone who knows how to keep their organization solvent.

                • Bladefist says:

                  @NightSteel: If they close on their own, due to bad practices, then we agree. If they close because government mandates forced them out, then I have a problem.

                  • NightSteel says:

                    @Bladefist:

                    By that logic, the banks should be closed already. Predatory overdraft policies and fees, making loans to people who can’t afford them, packaging bad CDOs.. these would all seem to qualify as ‘bad practices’ to me. So, once again.. the problem isn’t the banks’ insolvency. It’s that the government is trying to make them solvent again with our money, rewarding their bad practices.

              • Tiber says:

                @Bladefist: Believe it or not, banks existed and profited long before overdraft fees. I’ll take an honest company one over one which preys on my mistakes any day, even if it means paying a bit more. Unfortunately, they’re a bit hard to come by.

                Besides, they’re not saying banks can’t allow overdrafts. They’re saying they have to give them the option to choose not to do it right up front. I thought it was supposed to be a convenience anyway, so what consumer wouldn’t want it?

              • chikarin says:

                @Bladefist: how is this a bailout for people? it’s just consumer protection. people not being automatically signed up for services is a good thing.

                allowing this kind of shenanigan is dumb as bailing out the banks. if they can’t make honest revenue they deserve to be closed.

        • Bladefist says:

          @teh: Also, people need to learn to read the fine print. Details in the fine print isn’t sneaking. A smart consumer reads everything.

          • B says:

            @Bladefist: Yes, it is sneaky. Banks are sneaky about this by posting transactions to an account in order to maximize overdrafts. They post the largest transaction first, overdrawing the account, then each transaction after that, each one incurring a 35 dollar fee. Then they post the credits last, just to be extra careful that they squeeze every last dime out of the customer.

            • Bladefist says:

              @B: They should post them in order they receive them. Doing otherwise would be scamming, and I would be on board for regulation of that.

              • sinfonian94 says:

                @Bladefist: I agree with you. the problem is that all banks do it the scamming way.

              • eXo says:

                @Bladefist: You are also totally ignoring the practice of holding back small charges (lunch, a coke, etc) and then clearing a large charge first (rent, car payment) which then puts the account into overdraft. Now I’m paying an extra $35 for every small charge that was held back, instead of the one $35 charge I should have paid due to the large amount. This happens all the time. Anytime my bank account gets low I notice small charges in my pending que seem to hang around for days, while large charges go from pending to cleared ASAP. Hell, I was charged overdraft fees once for some company putting a hold on my account for some obscene amount that they never intended to charge me. Once the hold was gone I never had dipped below zero in my account, so even though it didn’t even clear they still tried to charge me nearly $250 in overdraft fees.

                Besides, this isn’t outlawing the practice of overdraft protection. It is outlawing the process of singing you up for it without asking. If you have a problem with people being given a choice, then you have no business at a site titled “The Consumerist”

          • sinfonian94 says:

            @Bladefist: The entire point of fine print is to be sneaky.

      • legwork says:

        @Bladefist:
        Hello no, but every American should be entitled to a higher level of integrity in their financial institutions than what we’ve seen the last couple decades. There are other ways to make money than the manipulation and borderline theft practiced by our banks.

        If they can’t make an honest income they don’t deserve…

      • B says:

        @Bladefist: Last I checked, the way banks generate revenue is they take the money in my checking/savings accounts and loan it out to people. If that’s not enough revenue for them, then the bank is doing something wrong.

        • Bladefist says:

          @B: Yes, but banks roll in our lives has increased. Paying our bills, issuing us debit/credit cards.

          Loaning it out is part of their business. But if you have $100 in your account, loaning it out gets them basically nothing.

          • B says:

            @Bladefist: True, but banks have automated most of the services they offer us, and in terms of manhours, it’s a lot easier to service our accounts than it was back when everything was done through a teller. Automated bill paying is a lot easier for them than processing checks manually. A lot more accurate, too. And servicing an ATM is cheaper than employing a full-time teller.

      • Trai_Dep says:

        @Bladefist: You’re against informed consumers making a rational buying decision from a variety of competing businesses based on their unique circumstances?
        Why do you hate Adam Smith so? Granted his powdered wig is pretentious, his stockings show too much leg and he drinks like a fish. But he’s sort of cuddly if you tickle his underbelly just so…

      • kamikazee05 says:

        @Bladefist: So let the banks charge for checking accounts and other services – masquerading this as a “courtesy” is the problem. Where is the “courtesy” in charging me $35 for a $2 cup of coffee? I bet I’m not alone is saying that I rather my card be declined than occur all those fees. I am NOT condoning anyone who is fiscally irresponsible or makes overdrawing their accounts a habit, but come on these things happen…

        • HogwartsAlum says:

          @kamikazee05:

          YES! Please, if I goof up and try to spend more than I have, please decline my card. That is much better than getting socked with fees. For crying out loud, if I don’t have any money, quit loan sharking me.

  4. GMFish says:

    YES YES YES OH MY GOD YES!!!!

  5. parliboy says:

    I’m honestly a little torn here. I’m with ING Direct, and there is no $35 charge for my overdraft. Instead they charge me like 10% interest on my overdraft until I get it above zero. Kinda like a small floating credit card. Only happened to me once, when I overspent on vacation. But it was really cool.

    Besides, is there really a difference between a $35 charge where your check goes through and a $35 charge where your check doesn’t go through? Oh yeah — in one scenario, my check goes through!

    • jeteplumererie says:

      @parliboy: there is nothing to be torn over- just say “yes” when they ask your permission ;)

    • daub815 says:

      @parliboy: This also happened to me. But I was pulled some money from my Orange Savings account the same day. No interest charge. That was almost a bad day because my apartment complex pulled the rent twice!

    • woogychuck says:

      @parliboy:

      The reason this is a problem is that debit cards have changed things. It’s not uncommon for me to use my debit card 8-10 times a day. If I make a miscalculation or my payroll check takes an extra day to clear, I get nailed with $350 in fees. A $35 fee isn’t so bad when it’s protecting from a rent check bouncing. It sucks when it’s allowing me to buy a coke and some gum.

    • Hyman Decent says:

      @parliboy: My brick-and-mortar bank also does not a charge me a fee when I tap my overdraft protection line of credit, just interest on the borrowed amount (albeit 16.9% APR, not 10%). They lose money on the transaction because they mail me a notice every time I overdraw and a statement for every cycle during which I had activity on the line of credit, since I don’t pay enough in interest to cover their postage costs. I don’t have a debit card on this account, so I don’t know that they wouldn’t charge me for a debit card transaction that causes me to overdraw, though.

      And if you’re wondering what bank this is, I’m not going to name it because I don’t want them to wise up. :)

    • TechnoDestructo says:

      @parliboy:

      The charge in the case where you bounce a check is for the inconvenience of your check bouncing. Also, the money is usually taken from the account of the person who deposited or cashed the check.

      Except with instant check clearing, it SHOULD be possible for checks to be confirmed before anyone has to deal with all that.

      Also, this is more of an issue with debit cards.

  6. MakGeek says:

    I agree. Turned off the second I found out it existed and of course after i got whacked 35 bones. Seems silly, if I don’t have money in account, simply deny the charge, don’t pay it and expect me to give you 35 for “being nice”.

    • Hyman Decent says:

      @MakGeek: Don’t they charge you a fee when they have to return one of your checks unpaid, though?

      • ludwigk says:

        There’s a check return fee, and some vendors might charge you for a bounced check as well, since it is an inconvenience to them. Those will end up being comparable to the $35 overdraft fee in some cases. It really depends. If its a $10 for a pizza, the overdraft fee seems silly. If you’re writing a check for a utility bill, you might rather pay the exorbitant overdraft fee than have your electricity shut off.

        The place that this ends up being a problem is situations like the following: You have $50 left in your bank account, and its payday (a Friday). You get your paycheck for $500, deposit it, and get ready for a night on the town. You don’t know this, but the deposit doesn’t get processed until Monday b/c you’re bank sucks.

        Then, you spend $3 for slurpie, $10 flowers, $15 dinner at different stores, then later get groceries for $40. This exceeds your account balance of $50, so overdraft fees kick in. Your bank, since they are not your friend, processes the charges as such:

        1) Groceries -$40
        2) Dinner -$15 + $35 overdraft
        3) Flowers -$10 + $35 overdraft
        4) Slurpie -$3 + 35 overdraft

        On Monday, you check your account, and you’ve been docked $105 in fees because of overdraft protection you didn’t want, and because your bank is a jerk.

        If you didn’t have it, you would simply have been declined at your grocery store instead.

      • Corporate_guy says:

        @Hyman Decent: No one uses checks. Debit cards need to be declined.

    • racermd says:

      @MakGeek: What I think is criminal is that these same financial institutions think it’s fair to automatically sign you up but then make it difficult (or near impossible) to opt-out.

      I had to do this once by filling out multiple forms and *gasp* mailing them. Then, if I’m lucky, it’ll actually take effect as I received no confirmation. I did actually ask for that verification and obtained it so I could raise bloody hell if they tried pulling that stunt on me again.

      Bastards…

      /bitter old man mode

    • mepoochkey says:

      @MakGeek: THANK YOU!!!! I agree!!!

  7. aguacarbonica says:

    This is especially bad when you do have an overdraft protection account…with no protection in it. Then the fee becomes $120. As a college student, I’m grateful for the lesson to pay a little more attention to those transactions that I always assumed were instant, and which weren’t being calculated until later.

    But I do think this practice is out of control and tricky, and I think most people would rather have their card declined than owe the bank like $70 for a careless $5 purchase.

    • nicemarmot617 says:

      @aguacarbonica: That happened to me in college as well. They signed me up without my permission and linked it to an empty savings account. Then when I overdrafted (which was also their fault, btw – how are they allowed to rearrange the order of charges AFTER they happen??) they charged me 4 of the fees and kept charging fees on fees because the savings account was empty. Then they told me it was my responsibility to pay all those fees for a service I never even signed up for.

      Thankfully, throwing a full-on-screaming shitfit in the middle of my local branch solved the problem.

    • corinthos says:

      @aguacarbonica: Agreed the first time I hit was in school and I put money in the back on friday at 11 and just deposited my check of like 800 dollars. Ended up going out to eat and to the movies the next night and then out for drinks. Ended up getting hit 4 times with the 35 dollar charge and then another 6 for the following monday since it didn’t post until tuesday. I don’t mind the overdraft fee but not after I have given them the money prior and they just take forever to post it. Luckily my parents had an account through the bank and my dad threatened to close his business and personal accounts from them and they credited it back to me.

      • corinthos says:

        @corinthos: Oh yeah and it might seem a lot of trouble to go through and close out several accounts for a charge under 150 dollars but my dad is the type of person who is doesn’t let things go. We grew up without cable until I was 16 and able to pay for it myself because back in like 1990 he was told disney channel was free for 3 months when he signed up. It showed up on the bill for only one month and they wouldn’t credit it back so he cancelled it and still has a distrust of the cable industry.

      • HogwartsAlum says:

        @corinthos:

        Yes, I was just thinking this. How is that when you deposit something it takes forever to post, but if you pay something, it clears at the speed of light!?!?!

        • aguacarbonica says:

          @HogwartsAlum:

          They also seemed to mysteriously post the largest transaction first so that after that money was taken, I would overdraft repeatedly for a pack of gum or a soda (I never got on top of that carrying cash thing because the free ATM is a mile away).

  8. Rectilinear Propagation says:

    That’s how it should work for anything that costs money or might incur a fee. Companies should not be able to say, “Hey, I signed you up for this thing now pay up!”

    • MrBlastotron says:

      @Rectilinear Propagation: As a branch employee at National City (PNC?) I can provide a first hand account of these scenarios. First off, we need to get appropriate terminology down. Overdraft protection is not the same thing as the “courtesy overdraft protection” program, or whatever that was. Overdraft protection is an optional addition to a customers profile in which they can either tie their Savings account to their checking and cover overdrafts that way (incurring a $15 convenience fee) OR setting up a cash reserve (small line of credit only used for overdrawn accounts [around 25% interest rate.]) The courtesy overdraft protection is being looked at by banks. PNC announced in the middle of 2008 that they would be allowing customers to opt out of overdrafting, in favor of declining the card outright or causing the check to bounce, or what have you. Something I wish ALL banks would adopt asap (and realistically make the norm.)

  9. JohnDeere says:

    ive been with boa for 9 years now. at first they would hit me with overdraft fees. now they just decline my card. i didnt ask for them to stop the fees but im glad they did. its kinda funny because the first day that my card got declined it made me very happy. kinda confused the clerk who was checking me out. i think she thought i was crazy for me enjoying having my card declined. but hey it saved me $34

    • tripnman says:

      @JohnDeere: Yup, another BoA customer here, both for personal accounts and the business accounts. I have this “feature” turned off on all of them (plus on my Cap One cards), and do giggle to myself on the rare occasion that a card is declined. Yes, I value my humility at less than $35.

  10. lars2112 says:

    I am in favor of keeping them only if banks would post the transactions in the correct order and not from highest to lowest in order to get more overdraft fees.

    Sad to admit it but in college if I knew I was getting paid in a few days and would have the money, I would still write the check (only if I had to) and suck up the overdraft fee.

    • econobiker says:

      @lars2112: “banks would post the transactions in the correct order and not from highest to lowest in order to get more overdraft fees.”

      echo that!

  11. Ash78 ain't got time to bleed says:

    And to add one more thought: My acid test on this kind of thing is this– “If everyone paid everything on time, can the bank be profitable?”

    The answer ought to be yes, IMO. Instead, more and more lenders have become reliant upon a certain amount of bad behavior in order to collect fees (late charges, overdrafts, etc).

    • econobiker says:

      @Ash78: Negative activity profits?

    • AtomicPlayboy says:

      @Ash78: That’s an excellent way to put it. Any regulations of banks and credit card companies should be predicated on this notion that penalty fees (and the policies which artificially increase their occurrence) should not be a necessary element of the profit margin. Perhaps that would encourage some more sane banking business models.

  12. Pylon83 says:

    I’m not sure how I feel about this. It seems that when the customer signs up, it’s in the paperwork somewhere that you’re being signed up for overdraft protection. If you choose not to read what you’re signing, well, that’s kind of your own fault. Is it really necessary to pass a law to protect people from their own carelessness? If you don’t like banks that auto-enroll you in overdraft protection, choose to bank at an institution that doesn’t institute such policies. The Feds have better things to do than babysit consumers who are too busy/lazy to read the fine print of the agreements with the banks. I’d favor a rule that heavily punishes banks that don’t disclose the auto-enroll feature, but I suspect there is already something on the books for that kind of thing. This is simply aimed at voluntary transactions where one party chooses not to understand the entirety of their agreement with the bank (again, assuming that it is indeed disclosed in the agreement).

    • Rectilinear Propagation says:

      It seems that when the customer signs up, it’s in the paperwork somewhere that you’re being signed up for overdraft protection.

      @Pylon83: It wasn’t in the paperwork for the last account I opened. It wasn’t something they offered yet. I got a letter in the mail about a month after I opened the account stating that they were signing me up for the new service.

      • Pylon83 says:

        @Rectilinear Propagation:
        That becomes more problematic for me. However, if they gave you notification prior to enrolling you (presumably under some other clause in the contract saying they can do so w/ notice), and sufficient time to reject, I don’t see a problem.

    • DeeJayQueue says:

      @Pylon83: How about when they won’t take you OFF the program that they signed you up for without you knowing about it?

      I’ve been banking with Wachovia for years now and I knew they did that ever since I opened my account. However, when I opened the account I asked the branch manager if I could opt out of the system and just have my card declined instead of incurring the fee, since most of my purchases were small on the card. She looked at me cross-eyed for a second, then said it was possible but that I’d have to call when I got my debit card and let them know. I did that, repeatedly, and still to this day will occasionally catch a fee for going into the red. I get around this by trying to keep a minimum balance at all times, but it doesn’t always work. Strange thing is though, at the gas pump it lets me squeeze every last cent down to zero in my account, and then the pump shuts off like magic. Nowhere else though. So either the gas stations have some high-end tech at the pump (doubtful) or everyone is kind of complicit in overdrafting the customer whenever possible.

      • chocolate1234 says:

        @DeeJayQueue:
        The reason you probably still get hit with fees sometimes is that transactions don’t normally post to your account immediately. Usually businesses will put a hold on your account until it clears through, but it’s not always for the correct amount (sometimes a little less). So, if you used your card at two places, one of which held for less than the actual transaction was for, you could still end up going negative. Those are the pitfalls of dealing with debit cards and electronic transactions. The system isn’t perfect.

    • NightSteel says:

      @Pylon83:

      I’m all for personal responsibility, myself, but there has to be a line somewhere for burying things in small print. Allow me to link to another example from the Consumerist: [consumerist.com]

      If you had an AT&T service, got hit with a fee, and when you complained, the operator told you ‘Tough, that fee was detailed on page 1753 of the guide’, wouldn’t you be mad? I know I would.

      The existence (or lack) of overdraft protection on an account is *important*, especially in an age where banks reorder transactions to maximize the number of overdraft charges applied to accounts. This is not something that *should* be buried in the fine print. It’s not like it would be difficult for banks to add a checkbox somewhere on their sign up forms giving the consumer a choice.

      Your advice of choosing a different institution isn’t always practical, either. Some people have reasons to bank with a specific institution, because other institutions do not meet their needs for some reason. And, sometimes the only alternatives are other banks that have the same practices, which would make changing pointless.

      Then there’s the fact that charging fees to people for having no money is inherently stupid, but that’s another story.

      Anyway, I understand your sentiment, but the fact is, consumers do need protection, and requiring banking institutions to give customers the choice of opting out of an oft-abused fee scheme is not a great burden for the banks to bear.

  13. Fresh-Fest-1986 says:

    The convoluted and labyrinthine nature of most banks also works in their favor in this regard. I remember asking specifically that overdraft protection be removed, then of course several monthes later when I went $3 over I was hit with the fee. When I called customer service they pretended that I was making it all up. They actually suggested I take it up with the guy who set my account.

    Overdraft charges was the ultimate reason I made the switch to credit unions. I highly suggest this as well for anyone else whose ripped their hair out trying to get these type of situations resolved.

    • Anonymous says:

      @Fresh-Fest-1986: I got taht same song and dance when I took it up with Chase Bank. I’d specifically asked teh fellow who set up my account if teh would decline charges if I had no money and he said yes. the first time I went over and got charged I called in quite a tizzy and was told to go talk to him again; he no longer worked there.

      Even funnier was that I’d changed to chase because Compass bank said i would have to speak to their district manager to get approval to remove the overdraft from my account. Yeah, I closed that account as quick as I could pay the almost $2oo they charged me.

  14. Laughing-Man says:

    The number of checks written (and by default the number of checks bounced) fall and the bank loses that income so they bring another up. If legislation knocks this down them mark my words a different fee or “courtesy charge” will pop up. I love the name courtesy charge – its almost as if the banks would be offended if you were upset about the charge.

  15. IT-Chick says:

    I too have had the crazy bank fees. In fact, just after this Christmas. Thought my check went in, it didn’t get posted before all my charges for gifts, dinner, etc, and WHAM, checked my banking the following business day after Christmas and was shocked to see $198 in overdraft fees. One was for a $7.99 CD I bought, then $10 at Hallmark. Actually, none of the transactions that put me over were even close to the charge the bank imposed. I called and they reversed 2 of the 8, but it left me feeling violated… and stupid.

  16. Adam Rock says:

    I tried removing mine about five years ago, and spent a half hour on the phone with a lady that *blatantly refused* to let me disable overdraft protection.

    Wells Fargo.

    • sasper says:

      @Adam Rock: I was going to post the same thing. I tried to remove this “protection” on my 5/3 checking account but they *refused* to let me do it.

      Now I leave $25 in my account just in case I need a few dollars cash and there’s one of their ATMs nearby. I refuse to use any of their other services because of this practice.

      • Flame says:

        @sasper: I leave $50 in there that doesn’t show up in my check register. Then, when I balance my account online, I mentally subtract $50 from whatever they think I have. That way, if I screw up, I’ll have to do it by more than $50 to incur any fees. It’s worked for the last 3 years now. :)

  17. EarlNowak says:

    Thank god for brokerages. I once got hit by the checking overdraft cycle when I had an account at wells fargo. Then I did some homework, talked to my parents, and opened a SmartCash and Brokerage account at Fidelity.

    Now if I don’t have enough cash in my brokerage checking to cover a check, ATM withdrawal, or check card purchase, they liquidate Money Market funds to cover it. If I don’t have enough in MMF positions, then it overdrafts to margin- which I can float comfortably if I want to pay interest (the max rate is 8.5%), or cover by moving funds over from savings, or selling equities.

    No fees for the overdrafts, just margin interest… Which is tax-deductable.

    It was kind of a pain to set up (they have a “funds manager” that has to be configured properly), but it’s very flexible and powerful. Plus, fidelity refunds ATM fees worldwide!

  18. JGKojak says:

    How in the world is it “babysitting” by the feds to pass this law?

    Seems to me, passing a clarifying regulation that states that, yes, consumers have to explicitly sign up for this instead of having it buried in the fine print is incredibly do-able and reasonable.

    I am not a “lazy consumer” if I don’t have time to read a 30 page fine-print document when I sign up for a bank account- 1) I shouldn’t have to, and 2) since when is it a best consumer practice to not make all charges clear to the consumer?

  19. twophrasebark says:

    YES.

    What’s worse then paying $35 because you swiped your debit card for a $0.99 candy bar at the drugstore?

    Hearing a bank representative tell you how this is a “service” and most customers would “want” to have their transaction go through even if they do not have enough money in their account. For $35.

  20. Goatweed says:

    I don’t know, I’ve only bounced 1 check in my life and since then I’ve always made sure that I don’t write a check or make an e-payment unless I have or transfer the money to the account first. I never use my debit card for anything other than an ATM transaction, either – I’m living in the past, aren’t I? lol

    • HogwartsAlum says:

      @Goatweed:

      No, you’re doin’ it rite, akshually.

    • lauy says:

      @Goatweed:

      You are absolutely doing it right. If you don’t spend money that is not available to you (based on YOUR calculation, NOT the available balance provided by the bank), you should never* have an NSF/OD fee. As someone who has worked in the banking industry her entire professional career, I use my accounts in near the same manner as you (I do use my check/debit card for purchases).

      *unless you have fraud or an error on your account, which the bank should reverse. Every bank I have worked for (most of the large ones left) have this policy.

  21. yagisencho says:

    The fee that pisses me off even more than overdraft is the one for bad 3rd-party checks.

    1) 3rd party’s account was overdrawn.
    2) I didn’t get any money.
    3) I was charged $30 by my bank for a bad check they didn’t cash.

    W.T.F.?

    I would have gone after the 3rd party for restitution, but…it was my mother.

    • ionerox says:

      @yagisencho: This sort of thing pisses me off as well. You rarely can get the bank the check was written from to verify the funds are there as a consumer, and they’ll charge you to cash it there if you don’t have an account. So you’re screwed whether you try to deposit the check and it’s bad, or your screwed and pay a fee to cash the check.

      I hate checks. ACH and BillPay all the way!

    • Flame says:

      @yagisencho: Awkward. lol

    • Trai_Dep says:

      @yagisencho: Next time, remove those little brake pads on her wheelchair and keep them as collateral until her next check clears. Works wonders for me!

    • lauy says:

      @yagisencho:

      Just curious what bank is charging $30 these days for a chargeback (a cashed or deposited check that is returned unpaid, not the term applied to credit/debit card disputes).

      I ask because historically most banks charge $5-10 for this fee. Wondering who has jacked it up…

  22. flugelhorn says:

    Most of the overdrafts I’ve incurred have been due to delayed transactions– a corner store, bar or restaurant merchant not submitting their debit transactions for a couple of days. Meanwhile, I’d forgotten that I spent that money, and the fees start to pile up.

    What would happen to these merchants if my overdraft protection was turned off? The card would get denied several days after I’d made my purchase and left, leaving them with…what? An unpaid tab? Sorta seems like it’d be similar to bouncing a check.

    I hate overdrafts, but they seem to guarantee that the system keeps on rollin’ and everyone gets paid.

  23. Eyebrows McGee (now with double the baby!) says:

    I am slightly confused. Does “overdraft protection” mean you’re allowed to write a check for more money than is in the account *when it’s not linked to another account*?

    I’m set up to automatically overdraft, but it draws FROM MY SAVINGS ACCOUNT (and won’t go if there’s not enough in savings to cover it). It rounds up to the nearest $50 in doing the transfer into checking, and it charges me $3.

    THREE DOLLARS.

    So I’m kind of going, “Holy crap, thirty-five dollars? SERIOUSLY?” Are you paying $35 to take an overdraft LOAN here on money you don’t have, which I can see how that might be a benefit for some customers, or are you paying $35 to access your own money in your own linked account? Because HOLY CRAP!

    At $3 it has on occasion been helpful, typically when my husband forgets to record a check in the register. Or I haven’t recorded one yet and he writes one not knowing I didn’t record one. But I still count that his fault since I’m in charge of the register. :D I think we’ve overdrafted twice.

    THIRTY-FIVE DOLLARS? That’s highway robbery!

    (I am with a credit union, tho. Hi, Homer Jay!)

  24. valarmorghulis says:

    I remember the last time I setup a new bank account. it was at least five “no”s to not have this service attached to my account. My current CU? One.

  25. Bladefist says:

    I’m against this. You don’t have to use a bank. And the feature of disabling this is available to those who think to ask for it. It’s not the banks fault you’re a twit.

    Also, a family member who works at a bank told me that most of their revenue comes from overdraft fees. So if you do away with it, or you get more people off it, you will definitely see more fees sprout. It’ll start with no more free checking, and the costs will get passed to everyone, including the responsible people who weren’t overdrafting.

    • Notsewfast says:

      @Bladefist:

      I’m inclined to agree with you… I don’t necessarily mind that the banks automatically opt you in, but i do think that the process of opting out should not be a huge hassle (something similar to signing up for paperless billing).

      What I DO think should be reformed is that banks charge $35 on 99 cent overdrafts. It should be in some way proportional. It would be nice if fees for overdrafts of $5 or less were a $5 fee, $5 to $100 overdrafts were $35, and over $100 could be $50.

      The problem with the system the way it is now, is that for a family living paycheck to paycheck,with a tight budget and a balanced checkbook, 99 cents is a rounding error that could cost $35 and catch them in a cycle of over drafting for months.

      • Eyebrows McGee (now with double the baby!) says:

        @Secret Agent Man: I just had a friend who, due to a bank teller error in entering a deposit slip, ended up $100 short in her banking account and overdrafted. Over the MLK weekend, when it was impossible to reach customer service, the bank cycled her up to FIVE HUNDRED DOLLARS in overdraft fees on that one problem, which was the bank’s error in the first place.

        THAT needs to be fixed.

        • snowburnt says:

          @Eyebrows McGee: Your friend probably could have explained the problem to the bank and had those fees waived. You’ve been here long enough that you’ve heard stories of people accomplishing this.

          It wouldn’t have gotten fixed immediately (because of customer service being closed) on Monday they could have had it straightened out.

          I feel like the fees are a good thing…if you don’t have the money you shouldn’t be spending it. People who screw up get punished. The problem I have is with the way that the banks can fiddle with the way that money is deposited and withdrawn so that they can cause an overdraft. I.E. you have $100 in the bank, deposit a check for $1000 and then you write a check for $500. In some cases the bank will force the withdrawal through before the deposit. Even worse than that, they’ll hold onto the check and try to force it through again just in case it was a mistake and you’ll incur another fee.

          • NightSteel says:

            @snowburnt:

            Not necessarily. Some banks have a policy of only reversing a certain number of overdraft charges, regardless of the cause. $500 sounds like 15-20 charges, depending on how much the charge actually was. If that happened to me, I called the bank to point out their error, and they told me they could only reverse two of those charges, I’d go ballistic.

            McGee is right. This needs to be fixed.

          • Eyebrows McGee (now with double the baby!) says:

            @snowburnt: “Your friend probably could have explained the problem to the bank and had those fees waived. You’ve been here long enough that you’ve heard stories of people accomplishing this.”

            Uh … yeah. I’m not stupid. Neither is she. She’s working on it. My husband and I, who are both attorneys, are working with her. The bank is refusing to play ball. She would have even been happy with the fees halved, though it seems clear to me that the bank owes her the fees back AND the $100 error that was theirs.

            She is a single mother whose deadbeat ex hasn’t paid child support in 6 years. This is a HUGE hit to her, like can’t-buy-groceries bad, and the bank totally doesn’t care.

            Needless to say she is closing the account and changing banks. We’re continuing to pursue other avenues.

            Regardless, $500 in overdraft fees is absurd.

    • legwork says:

      @Bladefist: “And the feature of disabling this is available to those who think to ask for it.”

      No, that is often not possible. If it were there would be much less of a problem. This proposal isn’t to make overdraft protection unavailable, it’s to make it less predatory. The only thing I can see wrong with this is the extra paperwork necessary to show that we were in fact asked. Still, that’s the fault of the institutions that have created the mess.

  26. WorldHarmony says:

    Banks love the profits they make from our accounting errors. Count me among those who’d rather have my card declined than be socked with a “protection” fee, as I prefer to not spend money I don’t have.

    • smartmuffin says:

      @WorldHarmony:

      If you prefer to not spend money you don’t have, this doesn’t affect you. I’ve never paid a dime in overdraft fees in my life. No credit card interest either. If you treat your cards as if they were cash (can’t spend it if I don’t have it), you will never, ever pay any of these fees. Ever.

      • NightSteel says:

        @smartmuffin:

        Until someone makes a simple mistake and double-charges you for something big, which sends you into overdraft, and then the bank reorders your transactions for that day so that the double charge goes first, and the lunch you bought, the book you bought on the way home, the check from last week that finally cleared that day, and every other transaction that cleared that day incur additional overdraft fees, and you suddenly owe the bank $300. Which the person who made the error refuses to pay.

        Personal responsibility only goes so far. People make mistakes. You could be the most awesome driver ever in the history of the world. It only takes one drunk jackoff to ruin your day.

        A simple change to sign-up forms at a bank is a small price to pay to avoid hundreds of dollars of pain.

  27. Airjoe says:

    Hmm, when I opened my account at HSBC, they asked me if I would like my card to be declined if I overdraft. Same thing for my wife when she opened an account just the other day.

    Well, I’m glad to see them required to ask, but I’m also glad my bank’s been doing it the right way!

  28. provolone says:

    Permission should be required AND there should be some other reasonable requirements before an overdraft is allowed for a checking account or a credit card.

    Before I got married I signed up for a Chase Freedom Visa card to use for any vendors that did not accept Discover or Amex. The first time we used the card was at the florist, who mistyped our balance and accidentally charged over $22,000 dollars to the card. The charge was approved in spite of the fact that it was many thousands of dollars over my limit. Chase did not even contact me over this charge, which should have been very suspicious.

    I later found out that I had also been charged a $40 overdraft protection fee. It took weeks to get the humongous charge removed and get the fee refunded. In the mean time, I was really stressed out by the fact that the credit I was counting on for other expenses was tied up.

    Chases actions in this case were completely unreasonable, and I consider the overdraft protection a scam anyway. What is the point of limiting my credit if they intended to hold me accountable for a charge that was much greater than the limit they approved anyway?

  29. yso says:

    i’m a little confused myself – my bank only charges me the interest on any overdrafting I do – switch to a bank like that seems to be the answer. No Insuff. Fee Charges or anything like that….

  30. kyle4 says:

    I think they could help the economy if they took out overdraft or put stricter laws on it. You have all these people overspending and either taking too long to pay it back or not doing so at all. This puts the banks and the economy in a tough position, where people continue to spend money they don’t have.

  31. TrueBlue63 says:

    I think this may vary by state, I remember being asked to sign something to approve overdraft protection (NJ).

    I also think that while this is a scummy practice, it is kind of funny that the banks are the villains, but people who don’t know that they haven’t got any money in the bank, but keep on shopping, they are innocent.

    America land of the free, home of the irresponsible.

  32. jmndos says:

    Visa Electron and Mastercard Maestro are TRUE debit cards that do not allow overdrafts, they will actually be declined if funds are not available.

    Maybe they will become as popular here as they are in europe.

  33. DoubleEcho says:

    Here’s what I sent them – This happened last summer and this was the first time I’ve ever had an overdraft fee.

    “I would like to tell you my experiences with the “courtesy” of overdraft protection. My wife and I budget our money well, but as with most Americans (especially these days) funds can become tight. We use our bank (PNC)’s Web Bill Pay to pay our bills, so we can have bills scheduled and also have a track record to see where our money is going.

    I manually set up our automatic bill pay to pay our mortgage each month corresponding to my paycheck date, and set it for a Thursday, which is 1 day after my paycheck is direct deposited into the same bank account. However, my bank decided to remove the funds for this payment 3 days before the payment should have gone out, which resulted in my account being negative roughly $300. I noticed this very early in the morning the day it happened, and since we had about $1100 in savings, I quickly moved money from Savings to Checking to bring the account up to $100 positive. This was now 2 days before my paycheck would arrive.

    On the date before my paycheck arrived, I was then hit with 4 overdraft fees of $30 due to small purchases that were pending, but then processed immediately after the mortgage payment was removed 3 days early. This resulted in my account going negative again, requiring me to take more money out of savings.

    I called PNC that day and calmly explained exactly what had happened. I was told that it was my fault that I did not have enough money in the account, and I should have known that Bill Pay would take my money out 3 days before the actual date I set the payment to be sent. So, in essence, even though the website shows a calendar date, you can’t trust it. I had to basically admit fault and agree to enroll in a program (for a fee) that takes money out of savings and puts it into checking, which also incurs a fee when this is triggered. For this, I got 2 overdraft fees refunded but still had to pay for the other 2.

    Why is it that in this age of instant online purchases, fast fiber optic networks, and large server clusters capable of billions of transactions a minute, a payment made either with a debit card or through THE SAME BANK’S bill pay service cannot be deducted from your available balance immediately instead of “floating” for several days. It was never a good practice for the bank customer to float a check, why should it be a good practice for the bank itself to float my transaction and then charge me a fee when they decide to fix their calculations?

    There is no excuse. Available funds can and should be instantly updated to reflect payments made from the account. A bank should not profit from questionable math and then force their customer to be the one at fault for this. I would rather have a payment rejected than incur $120 in fees – at least I can send the payment again once the funds are available.

    With overdraft fees, you can easily wipe out an entire week’s paycheck from small purchases. This is not a courtesy, this is more like handing a drowning person a glass of water.”

  34. Dethzilla says:

    Banks process payments in a way that lead to more overdrafts. I understand the consumer having to be responsible and keep track of things but with the online banking now-a-days, some people use it like a check register. What they don’t realize is every swipe of the card is not recorded immediately so the running balance is almost always misleading.

    You write a check that you believe will clear and because banks process transactions from largest to smallest rather than the order in which they were made… The largest one clears and soon as you hit that negative they charge you a fee, resulting in all those little $2 or $3 transactions also getting fees.

    • Dethzilla says:

      @Dethzilla: It’s basically a sham how they operate. I’ve gotten caught 3 times with this and now I’m pretty much done with Checking accounts. I have my money deposited, I withdraw my money and pay everything in Cash.

    • the_wiggle says:

      @Dethzilla: no no no no. see that’s part of the trouble. online banking was never intended to replace the register or absolve account holders of their responsibility to balance their accounts.

      if one doesn’t want to deal with paper registers, then one may deal with an online register*, or one may suck it up & balance out frequently via receipts

      *disclaimer: clearcheckbook.com user – luv this online register. now if i can just get DH to use it.

  35. oneandone says:

    I’m about to go comment on the proposed regulation – hopefully everyone who feels strongly about this will do so as well. Perhaps regulations.gov will feel the consumerist effect :-)

    I’ve banked in other countries, and the norm in some seems to be that you can overdraft quite a bit, but once you go below 0, you incur interest fees. I support that, even if the interest rate is quite high – you’re overdrawing your account, and you should pay some penalty. But if it’s something you can repair quickly (by transferring funds) or is a very small amount, the gravity of the error is less and the penalty should reflect that.

  36. Silversmok3 says:

    Yes they should.

    Just like the customer should keep an accurate record of what’s been spent, the bank also has the ethical obligation to account for and handle the customer’m money properly.

    Because of $35 overdraft fees, the bank doesn’t have an economic interest in maintaining an accurate pay schedule for their own employees to see ,much less Joe Overdraft .

    Maybe this legislation will encourage banks to post paid transactions as paid, instead of warping time and space to stack the transaction order to generate the most fees.

  37. coan_net says:

    Am I doing something wrong?

    Am I the only one who makes sure that I have enough in my checking account before I write that check?

    I don’t like how banks will process checks from highest to lowest to get “more” overdrafts – and don’t like it when they “hold” deposits to overdrafts happen – but for the most part – MAKE SURE YOU HAVE THE MONEY BEFORE YOU SPEND IT! (pretty simple if you ask me)

    • NightSteel says:

      @coan_net:

      See my above reply to smartmuffin in WorldHarmony’s thread.

    • Silversmok3 says:

      @coan_net:

      Ahh, so I thought once.

      Then Freecreditreport.com dinged me $100 out of the blue.

      Now im negative $30-something, and ive got 3 itunes purchases , 1 gas fill up, and 4 or 5 lunches swiped yet to hit the system. It is Friday.

      I spend 5 hours at work begging,pleading,and nearly offering phone sex with an Indian lady named ‘Sally’ to reverse the charge.
      She agrees;in 10-14 business days…..

      Call #2 to TCF bank.Thank Jesus they credited the overdrafts once the $100 reversal hit.But for 2 weeks I was sitting on a -$380 balance.

      Then there was the time WaMu took out $106.00 via EFT and didnt show it for 30 days…

  38. Roclawzi says:

    It’s quicksand. You post a charge and for one reason or another, it’s going to bounce. And that’s going to make 3 more tiny transactions bounce. Suddenly, Itunes songs are $35.09. And if it happens at a time when you can’t get in front of it, they’ll let you go deep in the hole on minor charges with major fees. And my favorite part is when I run to the bank with cash to cover a pending charge and they won’t post my CASH before the pending charge. The bankers will be the first up against the wall when the revolution comes.

  39. ochobit says:

    I don’t think such a measure is needed. I think that amongst the papers you sign when you open an account, you should be able to read it in plain english the major points of the agreement, and a clear and concise schedule of fees, including overdrafts fees, and any and all other possible fees.

    I know that my girlfriend and I were having a lot of money problems last year, and it definitely helped when we didn’t have any money, but were able to swipe the debit card to get gas or groceries.

  40. Omar Elizondo says:

    I hate banks! God I hate banks!

    When I was about 15 I went to my local bank and opened a checking account. They mentioned to me this odd idea of overdraft. “If you don’t have the money in your account, we’ll let it go and then charge you 29 dollars for that.” The banker said this with a smile.

    I said “So, if I don’t have money…..you will let me get into the negative……and then charge me more money…….am I right?”

    Once again she said “Yes.” I said, “That’s the dumbest thing I ever heard. I want to opt out of that.” She agreed and gave me a paper to sign.

    Well, jump 4 years later, I go over by 1.50 and here comes the charge. I mention to the agents at the bank that I opted out. The charge never should have went through. They then told me that “we changed our policy.” I paid the debt, closed my account and left. Till today, I think about the fact that they didn’t even budge a finger to retain my business.

    Now, I hate banks, but I love ING….

  41. XianZomby says:

    Absolutly. A debit card should function as cash. If there’s no money in the account, it declines. If you want to sign up for microloans at 2000% interest, then you should have to ask your bank for that. My buddy, who makes 10,000 a year, yes, 10,000 a year, he banks with BOA. Last year, he paid 1,200 in overdraft. He’s f*ing dirt poor, without a pot to piss in. I think he hopes when he slides his card and it accepts, it means there’s cash int he account. YOu don’t carry a ledger with an ATM card. You expect the electronic network to let you know your balance. That’s the promise of an electronic network. More than 10 percent of his income last year went to BOA. The bank is not your friend.

  42. Krobar says:

    Working for a bank I can only say this is going to cause people to lose more money out of pocket. The people who incur the majority of overdrafts are repeat offenders who spend more than they have in their account. What’s going to happen is that instead of just being charged the fee from the bank and the amount being debited from their account (into the negative), now they’ll get hit for an NSF fee of an equal amount to the old overdraft fee, their bank account itself won’t go any further negative than the fees push it, but now they’re going to have to make restitution to all of those places who didn’t get their money.

    Don’t get me wrong, I hate OD fees and think the way our company as well as many other financial institutions structure their fees is complete BS. But this rule alone won’t fix it. :-

    • the_wiggle says:

      @Krobar: another bank worker here & you are so right.

      or consider the alternative, calling each time something being processed may trigger an overdraft. can you imagine the resulting conversations. . .?!

  43. bricko says:

    You have to manage it like anything else. I have done it a couple of ways. Get a small line of credit at the bank and have them automatically use it to cover any overdrafts.

    Or tie it to your savings accnt and have it pulled from their. And Ive heard of some that will tie it to a credit card.

  44. the_wiggle says:

    that’d be a “no, bob.”

    account holders would be better served by having the ability to add/change/drop overdraft protection. have the appropriate, complete disclosures to include effective time frames set up with that.

  45. oneliketadow says:

    I’d love to charge them an overdraft fee for the money they took from taxpayers.

  46. ageshin says:

    I hate the overdraft option. For reasons beyond the scope of this posting I had my checking account frozen not once, but twice. The net result of this was that because of the overdraft policy my checking account was drained of money. I could not put money into the account to cover the payments or the overdraft. The stores would resubmit their demands for payment and $25. a pop, this was a while ago, and I was also charged for not making up the overdraft amount. This was First National Bank, now Chase. I did get the bank to give back some of the fees, after the account was unfrozen, but I still lost quite a bit of money. I then asked the bank to issue me a debit card with no overdraft feature. They did this after some argument. It is nuts to have to pay $35. for a $5.00 overdraft. I am all for breaking up the mega banks, and making strong regulations on just what kind of fees they can charge. As of now banking is like giving your money to Count Dracula for safe keeoping.

  47. kirschey says:

    Completely and not like the way credit cards change their terms of service either. They should do it in writing and require you to send a letter back signed if you agree.

  48. rickatnight11 says:

    The first thing I do when setting up a new bank account is “opt-out” of the overdraft protection (or use a protection scheme that pulls from savings automatically like Wachovia’s). Of course this is to cover my blatant lack of finance management on my part since I never have any idea of what’s in my account. I’d like my charge to just be declined…I should probably actually start using my Mint.

  49. morganlh85 says:

    This is why I love my credit union. If I try to use my debit card and don’t have enough money (sorry, I’m bad at balancing my checkbook) it will simply decline the card. When I have direct deposit, if a check is going to bounce they will simply hold it and clear it once the direct deposit arrives in my account.

  50. Alice Sparks says:

    But the banks will do this with your ATM card as well. I know BoA was famous for approving transactions that were not funded (even as a debit, not credit), and then getting their $35 fee. I had so many problems with them, I closed my account. I opened a new account at a different bank and have not had one problem since.

  51. mike says:

    I’m a bit confused: I have overdraft protection on my checking account. I’ve dipped into it a few times when a paycheck didn’t arrive when I expected it (falls on a weekend).

    I’ve never been charged an overdraft fee. I usually get charged the interest it accumulates, which is usually only a day or two since I always pay it back when I get paid.

    Is this the same thing? If this is the case, I don’t need the bank to ask me for permission.

  52. Anonymous says:

    My case is simple I called Bank of America after having gotten a few fee due to a shipping service with Fedex charging me automatically after using it instead of requesting payment. I called them to opt out the program of overdraft protection to avoid being charge when no fund were in the account and force Fedex to call for payment and to my surprise I was told it was not even possible to. That the best they could do was lower my limit of over draft to zero (0) and that it would limit my fees to only one as the system would not approved overdrafts if my account was negative but would approve them if it was positive which is ridiculous. I had a courtesy limit of 250 and that meant that if i used 250 it would allow it, but with the courtesy limit at zero the rep could not tell me how much over could i go as long as my balance was positive, meaning that i could have 1 dollar balance and try for a purchase of say 300 and probably get approved. Stupid if you ask me that zero could mean more that 250.

  53. Anonymous says:

    So what about banks that offer the “courtesy” overdraft protection and then stop it without letting the customer know?! I had one of the CSR’s tell me, back in November when I was TRYING to cancel that feature, that most customers utilize the “courtesy” overdraft protection when they need to get something paid and would rather pay an additional $35 fee than have their utilities get cut off, etc. Wachovia will post an NSF fee to your account one or two days AFTER the incident occurs. If you aren’t aware that something hasn’t cleared for a day or two, and you continue to pay bills, or whatever, thinking you had more in your account, they throw you into a tailspin with these charges they’ve made sure they’ve gotten paid for and screw the other transactions. Before I get preached to about always paying on time, making sure you have enough money in the bank, yada yada yada…with this recession we are in, people are struggling to make ends meet. Me being one of them. THe last thing I need is for a totally unexpected charge be deducted from my account when I very well needed that $35.00 for fuel or food. Thirty-five dollards is alot to me. Somehow the bank feels that its a courtesy that they offer this however don’t feel its a courtesy to let their customers know if they will not have that option anymore. I’m so tired of banks.