Hell Yes!

*still giggling uncontrollably at the pic*

And what is to stop banks from making them mandatory on the account and telling people if you do not like it go to another bank?

Yes, if only so I don't have to listen to stupid people on here whine about overdraft fees. In an age where it takes about 30 seconds to check your balance online there is no excuse for overdrawing.

@apd09: Well, if FDIC made a rule, ultimately, the bank could lose its FDIC membership. If Congress made a law, they could prescribe penalties.

The headline seems to imply that there's a proposal to make it such that when you swipe your card, if you have insufficient funds, the merchant could ask you if you want to overdraft. That would be ideal, I'd say, because you could decide on a case-by-case basis whether or not to overdraft.

But as far as I know, that technology isn't quite here yet. Instead, the proposals on the table are to require that banks overdraft "protection" opt-in. I'm similarly a big fan of this.

It sounds like a good idea, but it will no doubt be bundled with a couple billion dollars worth of pork.

@Shivver: Bullshit.

Online records are not accurate, and errors happen (overcharges, etc.) People make mistakes.

People should be allowed to say I'd rather have my card rejected than an automatic charge.

This is great- if you want your bank to automatically overdraft for you- wonderful.

I don't- I should have the choice. Many banks don't offer that choice.

YES. In today's day and age, getting a card declined doesn't really have a "stigma" like it may have used to. Too many times do lines go down and a card is declined. Decline it and I will try another card and find out why the first card was declined.

@TCama:
The technology is here. The banks don't want to do it because it will kill their overdraft fee to let people opt out on a case by case basis. They also then don't have the easiness to post your largest amount first to drain your funds so you get 5 overdraft fees on the 5 smaller transactions.

Other than out-and-out bribery, I can't fathom why a law like this hasn't passed already.

Banks have for years been gouging their customers and coming up with the most ridiculous lies to claim it's "for the customer's benefit." There is a limited law that requires banks to, at a customer's option, not pay NSF transactions, but banks do everything possible to not let customers know the law exists.

Bank of America calls theirs "Pay No NSF", and when I finally found someone that admitted to its existence, she did everything possible to talk me out of it.

The really interesting part is... once "Pay No NSF" was turned on, checks started clearing much faster. It seems that BofA was intentionally holding checks for 3 or 4 days, hoping that the account would go low balance so they could submit all the charges on one day and generate overdraft fees.

Oh and... conveniently, "Pay No NSF" doesn't apply to ACH debits and basically anything other than checks and, I think, debit card transactions. They still find ways to get around the intent of the law, but then... they're BofA. The law doesn't apply to them.

I've had to decline people in the past, and I would usually just say, "The card has been declined. I can try it again to see if it is an error with our system or you can try another method of payment."

Most people opted for try again, because, let's face it, the machines go down sometimes. If it declined again, they would step to the side and make a quick phone call. No big deal. Usually they had another card to back it up, or had some cash.

Of course, my favorites were the ones who wanted to write a check (after check card was declined). Thankfully, we only took business checks, so that was easy to get out of.

I'd rather my transaction be declined. I don't have the money, then I don't have the money. Maybe I carried a number down wrong when I was writing things in my register. Shit happens.

I think there are enough situations where overdrafts are legitimate mistakes on the part of the account holder (where they were legitimately led to believe they have sufficient funds for a purchase when they may in fact not due to double charges, a merchant charging too much accidentally, etc.) that this is important. I haven't been in an overdraft situation in years (thanks to my paranoia about my finances), but I think this is a legitimate protection for consumers.

@JGKojak: Not to mention how many times we have had stories of companies overcharging, doublecharging, etc. Then the banks rack fees upon fees upon fees.

The problem here is that bank transactions aren't free. Banks can't just be expected to eat the cost of NSF transactions if the payor doesn't have the money.

@Shivver:

All it takes is one single unauthorized transaction at the right (wrong?) time to put you in the hole, and then the bank takes it out of your ass from then on, leaving you to fight with the merchant. You think it's stupid that people whine about overdraft fees, I think it's stupid that people actually think that all it takes is vigilance to prevent them.

Just one transaction accidentally processed twice on a Friday could throw you hundreds of dollars into the hole, as the rest of your transactions clear over the weekend, and nobody is at the bank to stop it or even to accept your money to cover the fees so that you won't get any more of them. And then the bank will rightly say that it wasn't their fault the transaction got processed twice. And *then*, like another recent posting here, the merchant will demand an unredacted copy of your bank statement as 'proof' that it was their fault you accrued all these overdraft fees, despite acknowledging that the multiple charges were their errors.

@Jesse:

I'd be happy to bay the bank's cost of an NSF transaction. I highly doubt, however, that that cost amounts to about $35/transaction.

@Jesse: Declining a transaction is free, or very, very close to it.

@MostlyHarmless: (giggles)
Related: Peter Griffin's chin

@NightSteel: ...to pay. Eesh, that's what I get for commenting with a cold.

@JohnQPublic: But it doesnt have a red meaty shaft attached to it, does it?

I called Bank One awhile ago and tried to opt out of their overdraft program. They insisted that it wasn't possible to do so. So ever having had the foresight to call in advance, I can't get them to stop. So, yes I really think we need a law that prevents this. I don't care if its opt-in or opt-out. I just want the person on the other end of the phone to be required to take the overdraft protection off my accounts.

@MostlyHarmless: *hahahahhah*

@Jesse: Yeah, they probably pass that fee onto the merchant.

I'm Australian and the first time a bank back home ever charged me for an overdraft I called them up and in 2 seconds flat I was opted out of that service. This was 6 years ago! First thing I did when I signed up for an account in the US this year was ask about this and they said that I was not allowed to remove it because it was 'for my convenience' and that I should probably sign up for a credit card for more protection because this was also 'for my convenience'. My BS meter flew off the scale.

@NightSteel:
Fine. Charge me the, what is it, 25 cents it costs? You know what, I'll be generous, I'll let you make a 400 percent markup on your cost, and you can charge my ass a DOLLAR for rejecting my card- a DOLLAR that does NOT then generate a $37 fee (since I'm overdrafted and paying the bank $1).

@MostlyHarmless: Hahahaha didn't even see that at first. Love it.

I went to buy gas this morning using my Citibank Debit Mastercard. The pump automatically stopped at $13.24, which I thought was weird, but being short on time, I just left.

Checked my checking balance today and because of a screw-up I made in a transfer, my acccount balance WAS $13.24, now $0 because of my gas purchase.

Theorectially, I guess Citibank could have allowed me to buy more gas, then hit me with overdraft fees, but they didn't. This is good news!

For what it's worth, I do not have overdraft protection but do have a savings account linked to my checking.

@msbask: One more thing: I've never overdrafted this account by check or debit, so I really had no idea what Citibank's procedure would be.

I guess now I know!

Or like my bank does it they charge me 10$ to transfer money from my saving to checking. they call it overdraft protection account. They charge me to use my own money even do there is money in the account but its in saving not checking i hate that.

Oh and what about next business day your check will be deposited in account. But when i deposited on Saturday they told me that its not available on Monday but Tuesday by noon. So is Monday the next business day or Tuesday. I hate that.

@Shivver: Some people still write checks you know...

@JGKojak: Yep, that's it exactly. If banks were charging something close to what it actually costs them to process an overdraft, this wouldn't be a problem. But they're not. In fact, they won't even reveal what it really does cost.

[news.bbc.co.uk]

@Shandog:

The credit card idea is BS because any amount drawn against your credit line will incur a nice, hefty cash advance fees.

@Jesse:

Fee, not fees. It's been a long day.

About time! They need to put an end to withdrawals deducted before deposits! Wells fargo is the worst with this!!!

@Geekybiker:
I tried that for US Bank and they said all they could do was set me up with a credit card and OD onto that. I said no thanks.

@TCama: Indeed they do. At least every credit card merchant account I've ever seen still charges a fee for transactions that are declined

@Geekybiker: Time for a voice recording of the interaction (escalating it to supervisors) followed up with EECB and then registered letter follow up requesting to opt out of the program.

@apd09: I don't think any bank is going to tell you to go somewhere else these days...

@Shivver: The banks also put a "hold" on funds...and even if those funds never clear...as in the merchant doesn't send in the proper information they can still cause you to overdraft. Buying Gas with Wells Fargo or B of A debit card? They "hold" $1....then eventually charge the full amount......

@Shivver: Funny thing is that banks no longer debit/credit your account on a historical basis but on an amount basis. So that your check register ( or accounting software ) does not match their accounting anymore.

That is one reason this overdraft deal needs to be stopped...

@redskull: agreed....too many banks are competing for people's business. Personally about to tell Wells Fargo where to stick it with their "standard policy" of processing withdrawals before deposits...

@NightSteel: and when the over draft amount is under $1 they still somehow try to justify the "loan" at an extra $35 fee?

Oh and you have to love the process the big check and bounce all the little ones policy. When asked about it they said they figured the big one was more important...who are they to decide and besides they covered ALL the transactions anyway. They would have only gotten ONE fee if they did it the other way...but instead racked up 10 fees. That should not be legal!

@msbask: This is how we wish it always worked :D

You guys already have the right. It's called the right to leave your crappy bank and find a better bank.

It's so sad to me these days that our immediate response as consumers is to cry to Daddy Government to fix our widdle problems with his big guns rather than try and fix our problems ourselves through consumer action.

To me, forcing my bank to do this has no value, because I actually keep track of my money and don't bounce checks or debits...

@msbask: My bank is the same way-you have to opt in to overdraft, and if you don't, things like gas can only go to your current balance.

The people who are getting hit for overdraft fees will start getting NSF fees once they opt-out of overdraft. These people will probably end up getting hit twice when the authorized payee tries to take their money again.

Never pay bank fees. Open a credit union account. If there is a mistake and someone tries to pull something out twice, a credit union is more apt to help you and understand.

@AvonLady: Ridiculous, isn't it? That's why we need regs either 1. forcing financial institutions to allow account holders to opt out of automatic overdrafts, 2. limiting overdraft fees to within a reasonable amount of what an overdraft transaction actually costs the bank, or 3. both.