TCF Bank Adds New $28 Daily Overdrawn Balance Fee

Reader Jeff used to intentionally overdraw his bank account in order to have enough money to feed his family and gas the car. At $35 a pop, that’s a pretty cheap loan. But now that’s not going to be a viable option because TCF Bank has started to assess him a daily fee of $28 if his account is overdrawn by $5 or more.

Jeff writes:

I have been a customer of TCF bank for over 10 years. I’ve been mostly satisfied, even though I’ve given them large piles of money in overdraft fees. I know I should have opted out of overdrafts a long time ago, but occasionally I’ll double-spend my balance just to have gas in the car AND food in the fridge until payday. Paying at the pump places a $1 hold on the account until the full charge goes through in three days… plenty of time to spend the balance again on food. It’s clearly a bad idea, but if it feeds the family the last couple days until the paycheck arrives it’s worth the $35 overdraft. At least that’s how things worked last month.

This month instead of getting the usual $35 “NSF Fee”, my account showed a $28 “Daily Overdraft Fee”. Um… what? Clicking on the transaction presented me with a two page overdraft notice explaining the fee:

“TCF charges a daily fee of $28 if your account if overdrawn by more than $5. This daily fee will continue until you deposit enough money to bring your account positive or reduce the overdrawn amount to $5 or less. TCF limits this fee to 14 consecutive days. TCF does not charge a per-item fee for transactions we pay that overdraw your account. TCF charges $27 for any day that we return items without paying them.”

Really? $28 EVERY DAY? Also notice their extreme generosity, limiting this pain to 14 consecutive days. Nice to know a $6 overdraft will never cost me more than $400, right? Wow, it’s going to cost TCF much more than that… it only took me an hour to scrounge the money needed to bring my balance up to zero, and under 10 minutes with a customer rep in their main downtown branch to close the account. Goodbye, and good riddance. If this is fee reform, it’s certainly not what I was hoping for.

While I understand your sentiment about the surprise fee, and your frustration with making ends meet, overdraft fees are not supposed to be temporary loans. If that’s your common practice, I’m sure the bank is as happy to be rid of you as you are of them. I hope that with your next bank you can find other areas in your spending that you can cut, or income that you can increase, so you don’t spend more than you earn.

Comments

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  1. Coffee says:

    Oh, Jeff…I hardly knew ye…enjoy the wolves! :D

  2. thompson says:

    Wow, that’s about as close to “bad consumer” as I’ve ever seen in an article.

    And rightfully so. Overdraft protection is not, and was never, intended to be used as a regular short-term line of credit. That’s what credit cards are for.

    • Dover says:

      Some people avoid credit to prevent the possibility of overspending, but Jeff somehow manages to overspend anyway. Jeff should get a credit card with a small limit, pay the balance every payday, and be diligent about those occasions when he does need to float a small balance for a short period of time.

      I think we just saved this guy a boatload of bank fees. Sorry for removing your revenue stream, TCF bank!

    • dibarnu says:

      If TCF didn’t like what Jeff was doing they should have closed his account and told him to get lost. Instead, they chose to profit on his poor decisions and apparent financial instability.

      • StarKillerX says:

        Sure and if they had canceled the account he would have written the above letter but complained about them canceling his account instead of charging him a fee, and chances are you would have complained and said “they should have just charged him a fee!” lol!

    • DH405 says:

      Bad consumer? If you’re a bank, and a customer puts themselves in a position where you can charge up to $400 for as little as $6 only temporarily out of your pocket, do you consider them a BAD customer or an AWESOME customer?

  3. yellowdog says:

    When I was younger I got a lot of speeding tickets. To no doubt accommodate this new risk, but probably also to help “persuade” me to take my business elsewhere, my car insurance company raised my rates astronomically.

    Solution: Stopped speeding.

    • Sian says:

      That’s silly!

      You’re supposed to drop your insurance provider and go ‘commando’.

    • DrRonster says:

      Speeding and other violations on surface streets is just dumb. I treat roads as if I was on a speedway. As fast as I can safely go, which at times is 110mph, on highways. Surface streets are the Pits, where ther are speed limits and penalties for violating it as well as for other reasons such as last nights race in which a car jack veered out of the driver’s designated pit into the pit road resulting in a stop and go penalty. I have a radar detector (Escort Redline) and will not speed or violate signs on surface streets. I have had no points assessed against me, but due to a screw-up by the Secretary of State, I am now the only individual in Michigan with -3 points. They claim they will nullify the once in a lifetime Basic Drivers course that I took BEFORE my case was heard. Got a laser ticket in May for 90 in a 70; Escort 8500 X50 had defective laser but since I usually drive isolated, didnt care about that. Traded it in for the Redline; 13 mile radar range and 6 laser antennas. Fought the ticket since the cop, prosecutor, and Judge really pissed me off. Prosecutor screwed up so bad in his motion to reverse the dismissal from early August, that if the cop had shown for the final hearing, I would have been required to insist that the county Prosecutor be cited for contempt of court; Michigan law required that when appealing the motion. Prosecutor did the only thing he could do, didnt let the cop show so I wasnt able to appeal the motion and the case was entirely dismissed with predjudice. WATCH OUT IN LIVINGSTON COUNTY! I will be writing an article about the 4 month ordeal for the National Motorists Association. I had contacted several media outlets to cover this since I never hire attorneys and can readily interpret state laws. I know I’m now a target for the MSP but in less than a month, my car goes into storage for the winter.
      I get my local paper and almost all the traffic related drunk driving cases are from speeding on surface streets which demostrates how dumb people are.
      In the past few years, I was pulled over for 124mph-no ticket or warning, 89 in a 70- no ticket or warning, 35 in a 25 but I was only doing 25 and the officer headed back to the station to recalibrate his unit and this one was on a surface street. I give cops on surface streets thumbs up.
      Another thing to consider is to assume the officer is wired for sound and has his dash camera working so you only till the officer approaches your vehicle and anything you say WILL be used against you. Necessity of speed has been my defense since ’86 when I let an Olds 88 was trying to take my lane away and I was driving a Z-28. Informal and formal had different stories by the cop.

      • Elite Marksman says:

        I’m going to call bullshit. There’s not a trooper in the country that will let you walk away from 124 on a public highway… Many officers will be glad to give you a ride to the local jail for going that fast too.

        • DrRonster says:

          State law requires that slower vehicles use the right lane of a 2 lane highway. Silverado was on my bumper and just as I was changing lanes, the radar detector went off. Officer saw that the other vehicle was going much faster and technically I was not the proper target. 0 pts since 86. Beat every ticket in court without a lawyer.

      • zibby says:

        Ha! Sounds like speeding is your career.

  4. bendee says:

    If you are living that closely paycheck to paycheck, don’t waste $35 on overdraft fees b/c “it’s like a cheap loan”. It’s not.

    • eturowski says:

      Unless he’s overdrafting by, say, $3500… but, yeah. I doubt it. I think I’m going to go ahead and blame the OP.

    • Dover says:

      I did some quick math, I hope it’s right. If he pays $35 to overdraw $500 for a week, that’s 365% APR. The same amount on a credit card would cost nothing if repaid during the grace period or $2.40 if he way carrying a balance.

      • mindaika says:

        If you’re living paycheck to paycheck and overdrafting every month, chance are no one is going to give you a credit card.

  5. Reno Raines says:

    You should probably go cash only dude.

  6. Thassodar says:

    Queue the “manage ur munny better, lulz” and “zomg get a new job if you can’t live ya bum” replies from the obviously superior Consumerist commenters. Never show financial weakness to these people, they have no sympathy, ever.

    • blogger X says:

      *sniff* *sniff*

      Looks like I found one…

      /sarcasm post is sarcasm

    • aloria says:

      I sympathize with this guy’s financial woes, but thinking $35 is “a cheap loan” is a major lapse in logic, especially if it’s just to have enough to buy groceries until he gets paid in 2 weeks.

      • megafly says:

        35 dollars IS a cheap loan for low income earners. Payday Loans and pawn shops cost hundreds of dollars. Only middle class people can just GET a credit card.

        • Elite Marksman says:

          Really? Citi gave me a card with 12.99% interest and an $800 limit about a year ago. And I make somewhere from 10,000-15,000 a year depending on how many hours I can fit around schoolwork.

          I had ZERO credit history before applying, and the bill is paid off every month with my interest rate now dropped to 10.99%

    • StarKillerX says:

      Well if he’s paying overdraft fees constantly he should manage his money better as the money he pays in those fees could be used to buy items he needs.

    • tbax929 says:

      Sorry but this post screams for Blame the OP responses. Why in the world would you use your bank account in such a way? I am as anti-fee as the next person, but I cannot muster an ounce of sympathy for the OP.

  7. Murph1908 says:

    Back in the day, people I worked with (and myself on occasion, admittedly) played the Jewel Juggle in Chicagoland.

    1. Write a check to Jewel Supermarket to buy your food, say $50.
    2. Three days later, just before the check should clear, write another check to Jewel for $50 cash.
    3. Deposit cash into your checking account to cover the first check.
    4. Repeat until payday.

    I know it’s hard, but my suggestion to the OP is how I avoided having to do the Jewel Juggle every week. Somehow, save $100 and leave it in your account. Forget about it, and set the $100 balance as your zero balance in your checkbook and mind.

    There’s ways to do it. I did it when I got my tax refund. You may tell yourself you ‘need’ that $100 right now for car insurance, food, or whatever, but if not having that $100 in your account costs you $35 or $70 a month, or even $35 every other month, you are better off leaving it in there. There’s no difference in your income to expenses leaving that $100 there, except that it’s actually lowering expenses.

    • SpiffWilkie says:

      Ah, yes…that would be a form of kiting. That would also be illegal (apart from stupid). Fortunately (unfortunately for some?) that is much more difficult now due to many stores moving toward electronic processing of checks.

    • maruawe says:

      and if you screw up just once and a check bounces then the market calls the DA and the DA calls you ask for your body to be present for sentencing…… no thanks

    • Golfer Bob says:

      Check Kiting – felony.

  8. Lethe says:

    If the money’s going to be there on payday, why can’t the OP create a budget that makes it so it isn’t spent before he gets it? It doesn’t sound like he is getting further and further into debt, so he apparently makes enough money to meet his needs. All he needs to do is organize it better.

    Reminds me of when I worked at a call centre for MCI. People would call in and get upset when I couldn’t change their billing dates to coincide with their paydays, and would always use the same excuse: “If I have to wait 3 weeks to pay the bill, the $ will be gone!”

    • TasteyCat says:

      Not only that, but there are unnecessary expenses he can cut if he looked around. I dropped my level of cable to the networks that I actually watch, bought my own modem instead of leasing, and returned the HD box, saving $35/month. I switched to prepaid phone and save $40. Instead of buying coffee every day and paying the regular price, I bring a cup to refill, and they charge me less than half, another $25/month savings (if I really needed to, it would be simple enough to just stop going there altogether). Everybody has expenses like this that they can trim. In the case of the OP, he could save $35 each month just in overdraft fees.

  9. Hi_Hello says:

    you have bigger problems than this that you should be concern about.

    What will you do if you don’t get your next pay check?

  10. Admiral_John says:

    “I know I should have opted out of overdrafts a long time ago, but occasionally I’ll double-spend my balance just to have gas in the car AND food in the fridge until payday.”

    I have zero sympathy. Adjust your budget so this doesn’t happen.

    • SOCIALISM MARXISM WELCOME TO OBAMA'S AMERICA *fart* says:

      I agree. Eat less food or use less shelter.

      • Admiral_John says:

        Or cut back on the cable. Or don’t eat out as much. Or take your lunch to work instead of eating out. Or get a second job.

        • ballistic90 says:

          ASSUMING that is the point.

          You know what they say when you assume something? It makes an ass out of you and me.

          • Elite Marksman says:

            Not much to assume here, by the OP’s admission there will be enough money to cover the cost of the purchase and the fees. Getting a second job isn’t necessary, hell, even cutting back isn’t necessarily needed here, he just needs to just the gray stuff between his ears.

            If he can afford to pay $200 purchase, plus a $35 overdraft fee on Friday, some part of that $200 could be deferred until after Friday and then he would have an extra $35. Each week means the likelihood of overdrafting is further decreased. Hell, since he never had that $35 in the past he could just keep pretending he doesn’t and start a savings account with $35 a week transferred from the checking account. After a few months that would be a nice little emergency/vacation/christmas fund.

            The fact that he does this on a regular basis means that it wasn’t just some emergency that has come up that cost more than he could afford, he just consistently lives beyond his means.

      • Costner says:

        Or don’t give the bank countless $35 fees for loaning money for a short timeframe which equates to an interest rate of between 350 – 500%.

        It is hard for someone to get ahead when they keep making stupid decisions.

        • StarKillerX says:

          Exactly, if your already short of funds, how exactly does paying numerous overdraft fees going to help the situation?

    • scoutiebear says:

      “adjust your budget”. Yeah. I’m sure that’s real easy to do for him. Zero sympathy must be easy from behind your expensive blinds.

      • thompson says:

        You do realize that you don’t have to be rich to live within your means? While “making more or spend less” may be easier said than done, that’s not the bank’s fault. Overdrafting is a symptom of an underlying problem: the OP doesn’t make enough money to cover his budgeted expenses. That’s unfortunate, but again, not the bank’s fault.

        This idea that you somehow have to be loaded, a part of the “1%”, in order to make responsible financial decisions is just wrong.

        • RvLeshrac says:

          You don’t know that he doesn’t already have multiple jobs, or what his expenses are. Perhaps there are medical bills to pay. Perhaps there is no other work. Perhaps property taxes are screwing them over. Perhaps they’re paying a mortgage. Perhaps they’re paying on a car because that’s the only way he can make it to work.

          I like how the solution is always “find another job” or “reduce expenses.” It is pretty fucking difficult to find even *one* job, and you can only cut out so many things. Unless you think maybe he should just slowly starve his family to death.

          • Thespian says:

            If you’re desperate enough, there are always jobs to be had. It’s just that they’re the type of jobs many people feel are “beneath” them, like working in a kitchen or scrubbing floors. If I had kids to support, there’s no job I wouldn’t take if I had to, but there are a LOT of people out there who would rather claim that “there are no jobs” rather than do some not-so-pleasant work.

      • Admiral_John says:

        I’ve been where he is… I’ve had issues with overdrawing my accounts and getting in the hole with my bank but it was through my own irresponsibility and the same kind of thinking he was utilizing, so I got a second job.

        If you indulge in this kind of financial behavior you get bit in the ass eventually.

      • StarKillerX says:

        Well his first adjustment should be to stop giving the bank “large piles of money in overdraft fees” since of course that gives him less to spend on his needs it can easily feed upon itself.

        But at the end of the day, he was doing what he knew he shouldn’t be so are we supposed to feel bad that the bank is trying to encourage people to stop overdrafting?

    • dibarnu says:

      If TCF didn’t like what Jeff was doing they should have closed his account and told him to get lost. Instead, they chose to profit on his poor decisions and apparent financial instability.

  11. Jenn98765 says:

    While it’s lovely that all of you (including the Consumerist’s Managing Editor) are enjoying this opportunity to claim the financially superior high ground, you might also consider that it’s insane for a bank to have a $28/day fee and impose it without prior notice.

    I’ve not overdrawn an account ever, but I would be outraged by that fee. But by all means, let’s all take this opportunity to show that we know better.

    • thompson says:

      My credit union, which has just about no fees for anything, incredible interest rates, and amazing customer service, charges $25/day for an account in overdraft.

      The fact of the matter is, someone who can’t keep enough money in their checking account and overdrafts (especially regularly) is an INCREDIBLE risk, and honestly the overdraft protection isn’t designed to be used as a regular line of credit. It’s for those “oops” moments, nothing more, and the fees are designed to channel you into more appropriate lines of credit.

    • SOCIALISM MARXISM WELCOME TO OBAMA'S AMERICA *fart* says:

      It’s pointless, there’s people on here that don’t seem to even think a company CAN screw a customer. They all have a “right to profit” after all!

      • George4478 says:

        They are the flip side of the commenters who think consumers shouldn’t have to read bank statements, credit card bills, terms and conditions, contracts, etc. That companies must waive all fees associated with the “I didn’t read…” situations.

    • orion70 says:

      I agree it is insane. A $28 a day fee and you never stand a chance of paying off your “oops”.

      Easy enough to say “don’t go there”, but unexpected stuff happens.

    • TasteyCat says:

      Bad consumer loses to bad business.

    • Costner says:

      It is insane for a bank to charge that fee withou prior notice…. but I also believe such a practice has been made illegal by recent legislation.

      Therefore, it is highly probably that Jeff simply didn’t read his account disclosures and the only reason he even noticed his fee was because he overdrafted his account.

      Now I suppose a bank could charge a reasonable interest rate for short term loans rather than a flat fee. They could even give someone a revolving line of credit for exactly such a purpose. Whats that you say? You mean that is a perfect description of a credit card? Well who would have thunk it?

      The fees seem obscene I’ll grant you that, but I beleive they are an incentive for people to not over draft their account. We need to keep in mind that the law also requires people to OPT IN to this type of thing, so if Jeff is getting slapped with overdraft fees, it is because he actually wanted his bank to do so intead of simply declining his debit card transactions or returning his checks for non-payment (which would result in merchants slapping him with at least a $30 charger for each and every check).

      I really don’t know what people expect in this case. Jeff is doing this to himself and actually had to go out of his way to get into this situation. I’m not sure what else the bank should do… because not charging a fee or offering some form of disincentive would just suggest people like Jeff would continue to abuse the system and take more and more money on advance.

  12. George4478 says:

    So your example $6 overdraft was OK when it only cost an extra $35?

  13. Blueskylaw says:

    Thank you TCF Bank for a happy childhood.

    http://29.media.tumblr.com/tumblr_lkmqk8XO1L1qhhvo8o1_400.jpg

  14. ParingKnife ("That's a kniwfe.") says:

    ” If that’s your common practice, I’m sure the bank is as happy to be rid of you as you are of them”

    What logic is this?

    $35 bucks for small loans is usurious. This is the bank’s ideal customer. Banks don’t make as much money off low balance responsible customers.

    • ZachPA says:

      Bank is NOT happy to be rid of him as a customer. On the surface, exorbitant fees for overdrafts seem like punishment by the bank, scolding the customer in a very expensive way not to do that again. But in reality, high overdraft fees are a cash cow for the banks, and, knowing that 90% of customers will eventually make good on the account and bring it positive, it’s a way for the banks to make a pile of cash in a way that few customers can dispute.

      • zibby says:

        Nah. If that was the case, the fee would be much smaller in order to slow-bleed the pikers and not scare ‘em off. $28/day says, “We hope to fire you as a customer or at least discourage this sort of behavior.” Definitely meant to be an attention getter.

    • consumeristjohnny says:

      “$35 bucks for small loans is usurious.”

      This is NOT a loan. A loan means I gave you money and you agree to pay me back., This is a douche bag spending more than he has in his account. This guy is stealing money, hoping to be able to pay it back in the future. I wonder how he would feel if his boss did this with his paycheck.

  15. RecordStoreToughGuy_RidesTheWarpOfSpaceIntoTheWombOfNight says:

    Yeah… there are probably better ways to extend cash flow than deliberately overdrawing. Banks usually have clauses that allow them to penalize people who habitually do so. A low-limit credit card that’s paid off every payday or so would be a far better (and certainly cheaper) alternative. I’m not usually one to blame the OP, but this plan was, in technical terms, hella stupid.

  16. Thumprr says:

    ING (and other banks) will give you an overdraft line of credit. If you overdraw your account, they treat it as a short-term loan, with competitive interest (I believe somewhere around 11%, if I recall correctly). There is a limit to how much you can borrow. Mine’s at $500, I believe.

    ING requires that you have an account at a brick-and mortar. Leave a couple of bucks in your TCF account (or some other brick-and-mortar that has free checking), and get the rest of your money to ING. Much better customer service, better rates, better website, free online bill pay, and you’ll never have to deal with this crap again.

    • frank64 says:

      Yes, this seems to be almost a secret. I know many have it, but it doesn’t seem to be brought up that much when you talk about the NSF Fees.

      You have to qualify for a loan, but if you have a job and pay your bills on time, I think most will be OK.

    • dvdchris says:

      Agreed, line of credit is far better to set up on your account than overdraft protection or just paying OD fees. WF charges me $10 to loan me $300 on a LOC at a competitive % rate (wayy better than credit card rates.)
      Have to admit this year I have used it numerous times as we live the new American dream of just getting by.

  17. Buckus says:

    On the one hand, $400 for an overdraft is absurd. On the other hand, Jeff shouldn’t be overdrafting in the first place. If it only took him an hour to scrounge up that money, why didn’t he do that before?

    • StarKillerX says:

      It’s ironic that when I first opened this thread I expected to be against this fee, but as the OP own words show the $35 fee was not a deterrent but this fee certainly is as it made him close his account (which since it appears it’s regularly overdrawn is that support to hurt the bank?)

  18. blogger X says:

    Came for the “OP needs to live w/in his means, don’t spend what you don’t have” comments.

    Per request, made fish tacos.

  19. frank64 says:

    I always look for a bank that has a line of credit attached to the checking and does not charge a fee to do so. I don’t think most banks have it, but many do. I know NFCU does, I have Middlesex Savings Bank in MA. I have a $5,000 line of credit, but they range from 1K-10K. If I were to go over I am only charged an APR of 16%. I was told I could use this like a line of credit, it is like an automatic loan I can pay back at my leisure.

    I think you get the added benefit when you search these banks out of getting a bank that is not out to get you. The banks that offer it are probably better in more subtle ways too.

    There is a way around most of the more egregious fees the banks impose. I don’t know why people feel they must just accept them or ask for laws.

  20. roben.anderson says:

    I am a customer of TCF, in no way am I defending them, but, I heard about this new overdraft fee set up a month or two ago.

    Dude should look for another job, or budget better (easier said than done, I know).

  21. Anachronism says:

    1. Its not a cheap loan. A credit card charges 10-20% per year. Your effective interest rate on the $35 fee for a loan that lasts a few days is probably several hundred percent, depending on the amount overdrawn.

    2. Its not a loan. You are overdrawing an account, and a bank doesn’t like you to do that. A flipside is that they get to make money off of you while they encourage you not to use your account that way. Win/Win for them.

    I’ll try to stay away from blaming the OP, I’m just pointing out some large flaws here.

    • Puppyclaws says:

      It’s a “cheap loan” if you can’t get approved for a credit card. Just taking a stab that somebody who can’t afford to not overdraft his bank account once in a while probably doesn’t have a huge amount of credit available to him.

  22. Torchwood says:

    I can hardly feel sympathetic here. Won’t frequent overdraft prevent the OP from being able to open a new account? Thirty-five bucks buys plenty of Top Ramen. In fact, a 24 pack of Maruchan Ramen (Roast Beef) goes for $5.21. It isn’t a great meal, but it gets you by.

  23. PennyAuctionWatch says:

    I have had problems with TCF and actually plan on closing my account. Thanks for sharing this.

  24. PennyAuctionWatch says:

    I have had problems with TCF and actually plan on closing my account. Thanks for sharing this.

  25. scoutiebear says:

    Here’s what I don’t get, Ben Popken et al. Our consumer is paying through the nose here-for the overdrafts and his choices. Why does he have to get the nasty judgemental lecture as well? What, “overdrafts were never meant to be personal loans” ? WTF? What are overdrafts “meant for”? Given the money they made off this customer, I’m sure they have well compensated themselves for his need for say, food. Zero sympathy? It’s the same with foreclosures. People have “zero sympathy” for the people who pay the price-losing their homes-for their choices, and yet the corporations who allowed them-sorry, encouraged them-to make those choices pay NOTHING. Where is the negative judgment on them? Sad what shills we have all become of the groupthink these giant banks et al. have wanted us to have all along.

    • calibri says:

      I’d venture a guess overdrafts are for when you screwed up and went over a few cents/dollars and not to double dip on a balance. Not judging the guy either way, but since you asked…

      • scoutiebear says:

        that’s exactly my point. They are for choosing to spend more than you have in your account. They’re temporary loans, not moral black marks against your soul. I avoid them simply because I couldn’t afford them. I think this guy has probably paid enough without Ben Popkin giving him a lecture on appropriate uses of his overdraft feature(what is an appropriate use that Ben Popkin would approve? )

        • StarKillerX says:

          So, this guy decides to intentionally do what even he knows is wrong, and then turns around and complains that it bit him in the ass and we aren’t supposed to find any fault with him because he already paid?

          I’d offer that while he paid for his actions he never truly accepted that it was his own damn fault as demonstrated by his own words “If this is fee reform, it’s certainly not what I was hoping for.” Cry me a river.

          What’s funny is I actually opened this story expecting to be against this sort of charge, and had this guy not been constantly overdrafting his account I probably would have done so but with the case provided anything the bank charged him is justified as he played a game and eventually lost.

          • scoutiebear says:

            So when Goldman Sachs et al. defaults on America, they get all the money they can carry away in their fat little hands, but when Harry Homeowner, who fell for the scam, has to live in his car as a result of losing his house, he’s the bad guy you have zero sympathy for. Nice!

        • consumeristjohnny says:

          THEY ARE NOT LOANS.

          Do you understand what a LOAN is? This is OVERDRAFT. It is ILLEGAL to knowingly write checks that do not have the money in your account to cover.
          And NO, I would have zero sympathy for the guy who is living in a house and not paying his mortgage. (which what he is doing). he is TAKING money from the bank to pay his bills.
          I ask you this. If his employer started having his payroll done this way would he think it ok? If he does, he is a moron.

          • dragonvpm says:

            He wasn’t writing checks, he was using his debit card which is governed by whatever contract he has with his bank and banks always spell out what would happen if you overdrew the account using a debit card. It’s a bad idea, but it’s not a crime.

            I couldn’t tell you the historical reasons behind that but if you look it up, checks are a different type of financial instrument than debit cards and credit cards.

          • scoutiebear says:

            So Goldman Sachs et. al can default on the rest of America, and it’s just business, but when Harry Homeowner does the same thing, and instead of getting rich gets to live out on the street at the end of it, you don’t have any sympathy! When corporations take billions of dollars in Tarp money and don’t in turn invest in their employees but instead lay them off, gosh, that’s just fine! But Harry Homeowner isn’t too big to fail! He’s the bad guy! He and all the other schmucks who fell for Wamu et al.’s easy money and easy advertising.
            It’s sure nice that those poor little banks have people like you behind them to help them out when they need it. My god. It’s one thing to be taken advantage of, it’s another to volunteer.

    • Costner says:

      “People have “zero sympathy” for the people who pay the price-losing their homes-for their choices, and yet the corporations who allowed them-sorry, encouraged them-to make those choices pay NOTHING. “

      If by “NOTHING” you mean the BILLIONS of dollars in lost investment income, foreclosure and legal costs, opportunity costs, and losses due to non-payment on top of BILLIONS in fines for doing exactly what you state then yes I agree they pay NOTHING.

      • frank64 says:

        Facts in the way of class warfare and rants? Not gonna work here, came to the wrong place.

        • scoutiebear says:

          WAKE UP!!! Are you saying, honestly, that banks aren’t the ones who a,) engineered this crisis b.) took their TARP money with open hands and c.) are now making more money than EVER? Are you really, really sure you want to say that?

          • frank64 says:

            Yes, the downfall in our economy happened for many reasons, and the banks had a part. We all had a part though and focusing on them as the only cause is very simplistic. For one thing they did not “engineer” the crisis. The were a victim as much, or more than most, their stock was and still is devastated. I agree their losses were self inflicted, but I really think so were ours. The bailout was mostly paid back, and of course they accepted it. You can blame the politicians for offering it. BOA was forces to take over Merrill Lynch and that ended up costing them a ton.

            I don’t believe the banks are making more than before. They are still having problems with the mortgages and there is more regulations. If you saw my other posts you would know I do not stick up for the banks at all, but I do think some of the rants do not hold up to the facts. That they accepted TARP does not mean they we own them. Especially because they paid us back. They owe thier customers a good product and in many cases they do not deliver.

          • zibby says:

            They planned it all along! It’s like New Coke.

      • scoutiebear says:

        Yeah, those poor banks are really just scraping by, aren’t they.

    • Azagthoth says:

      Hear, hear!

  26. calibri says:

    I’ve never had an account overdraft or been in a situation where I would be in dire straights like this guy seems to be. However, if they stated this change, as roben.anderson implies, then what’s his complaint? Regardless if the bank is profiting off of his constant overdrafting, they are obviously taking action to discourage such behaviour. Good luck at the next bank. Maybe they will enjoy the red/black yo-yoing account balance more than TCF.

    • frank64 says:

      The fees are out of whack with the costs, and even the risk. The bank is taking advantage of someones mistakes. It is more than just about the OP who may be making more mistakes than he should.,someone else could not tell the missus about a charge and they end up over-drafted. Sure this is their fault, but as a consumerist you don’t want a bank to swoop in for the kill. Especially if there are banks that don’t do it.

      They take someone in financial trouble and make it much worse than they should. Vultures.

      • zibby says:

        The bank knows the fee is unreasonable. The objective is to get this guy and people like him to go away. They are firing the customer.

        Of course, if for some reason the dude wants to hang around and pay the fee then at least his “business” becomes worth something.

  27. floodx says:

    I will lend the guy $6 for a $35 fee – once anyway. I am guessing it is typically more than $6 though.

    I am also guessing the guy can’t get anymore credit or he would – and ING runs a credit check to get the overdraft – it is not automatic…so that is probably out too.

  28. TheRedSeven says:

    Hmmm…I hate to say it, but this might actually end up as a benefit for the consumer. Probably not, but possibly.

    Instead of a $35 overdraft fee for EACH TRANSACTION that causes a balance to go further into the negative, it’s $28 per day.

    So under the $35 per transaction I could have
    $10.00 – $40 for gas = -$30.00 ($35 overdraft fee!)
    -30.00 – 10 for lunch = -40.00 ($35 overdraft fee!)
    -40.00 – 20 Dr. Copay = -60.00 ($35 overdraft fee!)
    End of day balance:
    -60.00 – 105.00 in overdraft fees = -165.00

    Under the $28 per DAY fee it would look like
    $10.00 – $40 for gas = -$30.00
    -30.00 – 10 for lunch = -40.00
    -40.00 – 20 Dr. Copay = -60.00
    End of day balance:
    -60.00 – 28.00 in overdraft fees = -88.00

    Even after 3 days, the consumer is still ahead using the second system…

    Don’t get me wrong. It still sucks. Customers should not allow overdrafts on their account, and should do everything in their power to not go into a negative balance. But this might actually be a little better than before, depending on how long you’re allowing your account to remain negative.

    • humphrmi says:

      Yeah, I was thinking the same thing… except in Jeff’s case, this is probably better for most people.

    • The Steer says:

      Oh no ma’am. I’m a TCF Customer (a responsible one..) It’s $35.00 per overdraft ITEM. If the bank processes 4 OD item that’s $114.00 total. Remember, most banks order their transactions from highest to lowest – not chronological. So you would pay $35.00 for each additional item (assuming the bank allows the transactions) – not including the daily overdraft fee.

      The worst part? TCF processes withdrawals before they process deposits.

    • Herah says:

      Except, the bank wont keep approving transactions. Once it realizes you’re below zero, your transactions will get declined AND you’ll get the fee. Bummer.

      • The Steer says:

        Not TCF.. Say you have $20.00 in your account. You use your debit card for $15, then again later for $2 and one more for $3. You’d think that would wipe out your $20.00 and the bank would decline everything from there. Nope. You still have $20.00 until those two transactions catch up with your posted balance at midnight the next day. So ok. Lets say you keep shopping… You use your card again for $10 and again for $4 and once more for $6 now you’re an additional $20 in the hole not including the overdraft fees for EACH transaction. And TCF orders your transactions highest to lowest every day. Sooo…

        $15.00 – Paid (No fee)
        $10.00 – Paid ($35 Fee because you’re now five bucks in the hole)
        $6.00 – Paid + $35
        $4.00 – Paid + $35
        $3.00 – Paid + $35
        $2.00 – Paid + $35

        Plus an additional $28.00 for being overdrawn… $203 bucks for going 20 bucks over your balance (assuming you run to the bank and plunk down cash to cover the OD. Checks take 2-3 days to post and that’s still $28 bucks a day. Not to mention that deposits are posted AFTER the withdrawals are posted so even a rush to the bank wouldn’t cover the overdraft.

  29. jliptak says:

    For the poster, this fee is bad. But for the few times I’ve overdrawn it’s been because of a miscalculation and a quick transfer from savings was required. Having a single $28 fee vs. a per payment bounced fee would actually save me money.

  30. The Horror... says:

    Was Jeff’s last name Spicoli or Lebowski?

  31. sirwired says:

    $35 / each is a “cheap loan”? Unless you are overdrawing by thousands of bucks, $35 is an insanely expensive loan!

  32. SmokeyBacon says:

    I used to have TCF and am not a fan of theirs, but honestly, if the OP is doing this on a regular basis I am surprised they haven’t done something to prevent him from doing it sooner like closing the account. IF he hadn’t had to pay those fees he would have had that money he spent on them to help pad his account.

    I am curious if he has found a new bank yet – I know banks don’t like customers who pull things like this – I work with a guy who can’t get a bank account because of it.

  33. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    I’m going to take a different tact here. Since there seems to always be a need for both food and gasoline, is it possible to find a food bank or soup kitchen nearby to get a meal or two? Or a local church group? Our church regularly makes up food boxes for families in our neighborhood who are in financial trouble. If Jeff could do this, he could buy gas, have no over draft, and maybe start stocking up on a few inexpensive staples, like beans, rice, frozen veggies in bulk, bulk oatmeal, things like that. So when payday is a few days away, you can always make beans/rice/veggies. Yes, it’s boring and maybe not so great. But it’s nutrition and you won’t be hungry.

    I remember the days of having too many days until payday and not enough money to reach. I even ate road kill deer to stretch the meat budget. Yes, it’s gross. No, I didn’t get sick. I did learn a lot about anatomy etc. by having to cut up my own meat.

    I hope Jeff can find a better solution.

    • scoutiebear says:

      This is the best answer!!!! Great post!

    • SmokeyBacon says:

      This is actually a great idea – but I also think that Jeff needs to look at his spending habits. If he is running out of money and not spending on outrageous things then fine, but if he is buying Starbucks and has the top of the line cable package, then he should cut back on those things before hitting the food bank.

      That whole pay at the pump thing screwed me up this month to be honest – it didn’t post for like a week and a half when I made my last gas purchase, and because I didn’t scroll down far enough to see it hadn’t posted and I assumed it had, I had less in my account then I thought I did. Still didn’t overdraft thank goodness, but boy, taking that long to post pissed me off.

  34. Costner says:

    Does Jeff understand what the actual effective APR of his $35 fees were? Good god man… get a friggin’ calculator and you will soon realize “loaning” a few hundred dollars for a couple of weeks for $35 is the equivalent of paying almost 500% interest!

    Get a line of credit, or a small balance credit card, or figure out a way to NOT live paycheck to paycheck (here is a hint… not paying $35 overdraft fees a dozen times a year will go a long way towards financial stability). Get a part time job, sell plasma, have a rummage sale – do anything and everything to avoid paying these fees because they are keeping you poor and you aren’t even noticing it!

    I have to agree with Ben… TCF is probably not going to miss you as a customer.

  35. Kishi says:

    I’m just thinking that if he hadn’t paid $35 in overdraft fees at the start of that paycheck cycle, he’d probably have the money to buy a tank of gas without overdrafting at the end of the cycle.

  36. anime_runs_my_life says:

    A small loan, really? Where the heck did you learn your financing? I wouldn’t be surprised that no other bank wants to deal with you since they most likely reported you for being habitually overdrawn. And no, a CU isn’t going to save you either. They charge fee as well, and they’ll dump your sorry butt as soon as they can if they see this pattern as well.

    Time for you to start to learn budgeting your money.

  37. Portlandia says:

    “Goodbye and good riddence”…I’m sure they’re sad to see someone who continually overdraws their account leave…..

  38. KyBash says:

    If he’s shy just $50, wouldn’t a payday loan (as horrible as they are) be a much better deal?

    I don’t remember the exact rates, but I used them once when I had emergency on top of emergency on top of emergency and only needed to get by a very short time until I could get my feet under me again. It turned out that, even with their ungodly rates, it was far cheaper than what I’d have lost in interest and paid in penalty for cashing a CD early.

  39. PunditGuy says:

    There are better alternatives. In addition to the previously mentioned credit cards, banks like Wells Fargo will let you take out advances on your next direct deposit — assuming you have your paycheck direct-deposited. It costs $1.50 per $20 advanced. That means you could borrow up to about $460 against your next paycheck and be money ahead of paying your current $35 fee.

  40. TonyK says:

    I have to agree with the editor. The OP was abusing the system. It is a sad situation the family finds themselves in and I sympathize with them. However, trying to balance the month by using over-draft is not a smart way to go.

  41. consumeristjohnny says:

    Jeff,

    Do you realize writing a check KNOWINGLY not having enough to cover the balance is a CRIME.
    Do you realize that $35 every month would add up to $420 you could spend on food for your kids every year.
    Do you know the bank did not give you a LOAN. If you want a loan apply for one. I am guessing you won’t qualify.
    TCF has actually done a GOOD thing for most consumers. They are saying, we are not going to charge the guy who had a $3 overdraft cause every other check he has written to go NSF. Instead they will take them all as a ONE day mistake and charge you per day. Of course you are free to take your business elsewhere. Even a credit union will avoid people like you

    • dragonvpm says:

      Just to clarify, overdrafting an account via debit card is not the same as bouncing a check. Every debit card comes with an agreement which spells out what happens if you overdraft the account, and I want to say that the banks used to actually call it a “loan” for purposes of charging fees etc… for anyone who did do an overdraft.

      It’s still a downright stupid plan, but it’s not a crime.

  42. dibarnu says:

    While treating overdraft as a “cheap” short-term loan is stupid, let’s not ignore that $28 PER DAY is usury.

    • consumeristjohnny says:

      One- no such thing under federal law it is a state law. More than half the states have NO LIMIT on what can be charged. So usury is a big lie. The SCOTUS ruled in 1978 that where the bank is chartered is the governing law. No leg to stand on
      Two- It is not a loan. It is a fee.
      Three- IT IS ILLEGAL TO KNOWINGLY WRITE BAD CHECKS
      Types of Check Fraud

      Check Floating – Floating involves writing a check, and making a deposit to cover the amount afterward. This is a practice common among those who live paycheck-to-paycheck. Although innocent by nature, it can be a serious offense if repeated floating is detected by your bank.

      Check Kiting – Kiting is similar to floating, and often involves using multiple bank accounts to “cover” the transactions of one another until a legitimate deposit is made. As banks become more automated and checks clear more quickly, kiting has become more difficult to get away with. Many banks now have computer software the detects suspicious account activity, such as frequent large deposits but a low average daily balance.

      Bad Check Writing – Bad check writing can happen to the best of us, and may not necessarily be a criminal act. However, frequent bad check writing can ruin one’s credit and break the law. Many stores have a “bad check writer” list for those who consistently bounce checks.

      Embezzlement – When businesses engage in check fraud, it may also be a form of embezzlement. Additionally, if a bank employee is an accomplice to check fraud, that may be embezzlement as well.

      Forgery – Check forgery could be done in a number of ways, such as altering the amount of a check written to you; intercepting a check and rewriting it in your name; changing the routing numbers on a check; and many other ways.

      • dragonvpm says:

        Great breakdown of how checks can be used illegally but this guy was apparently using his debit card to take advantage of the processing time built into the US system. Writing a bad check is definitely a crime, but debit & credit cards work differently and overdrafting those is not a crime (even though it is monumentally dumb to be doing what this guy was doing).

        As an interesting note, his use of overdrafts wouldn’t have worked well in places like Canada where the transactions are processed immediately. If you don’t have overdraft for the account the transaction would just be declined. Banks themselves won’t extend overdraft protection to all accounts because it really is an expensive short-term loan and they won’t do that for anyone who doesn’t have reasonably decent credit.

  43. dragonvpm says:

    So clearly this guy needs a lot of help sorting out his finances, but I could have sworn that overdraft fees were actually called loans and banks were originally saying they were doing us a favor by letting us “borrow” the money and “only” charging whatever the overdraft fee was for that “loan”

    I’m not saying it was right, but IMO if the banks wanted to call it a loan then it’s really not fair to pile-on this guy for taking them up on the “loan” that they so “generously” included with his account.

  44. Greggen says:

    TCF is changing its ‘free’ checking accounts to require $1500.00 minimum balance or 15 separate check/debit card transactions next month. The fee is $9.95

    • StarKillerX says:

      Well if you actually use your debit card it wouldn’t seem that it would be hard to reach 15 checks and/or transactions a month. Rent/mortage, gas, electric, phone, cable/satellite there’s 5 and you haven’t even filled your tank and got any food yet.

      I’m curious, do they charge per transaction? I’m only asking because it just seems strange to have a minimum transaction over ride a minimum balance requirement, especially since I thought most wanted to limit transactions.

  45. JiminyChristmas says:

    I’ve lived hand to mouth before, had no credit and was desperate for cash. Even in those circumstances, $35 or $28 is not cheap for a short term loan. If the OP owns anything of value, getting a loan at a pawn shop costs less than half that. Let that sink in – you can get a better deal at a pawn shop than a bank.

    Back when I was in grad school I hocked my guitar a few times when I was short of cash. If I redeemed it within two weeks it cost something like $15. I never did payday loans or anything like that, but I would guess that even those would be cheaper than bank overdrafts.

  46. Kestris says:

    Hey guess what? Bank of America does the same thing if you’re overdrawn for more than x amount of business days (I think it’s 5, I’ve tried to not be overdrawn ever since they raised the overdraft from $20 to $35).

  47. toiletdog says:

    “Reader Jeff used to intentionally overdraw his bank account…”

    Done. I am not sure what there is to defend here….

  48. Christopher Wilson says:

    Instead of overdrafting, either use credit or learn to extreme coupon (theres plenty of sites with coupon matchups done for you).

    You could also look at a bank like ing direct, their electric orange gives you an overdraft line of credit and you pay interest instead of a huge fee.

  49. pjschwartz says:

    Although not well advertised, TCF does offer the ability to link your checking account to a line of credit (up to $2,000) to avoid paying a $28 over draft fee.

    What customers might also want to do when they receive their next statement, is check out the revised list of fees. The terms for free checking have been changed, and having direct deposit no longer waves the $9.95 service fee. Also, unless you call and tell them to stop sending you check images with your statement, they will be charging you another $1.95 / month.

  50. maruawe says:

    Even for someone habitually over drawing their account this seems a little steep. If you do the math on this one the interest is overwhelming even worst than those title or payday loans.

    How is this legal for a bank to charge this amount for an overdrawn account……I think that I would sue before paying this outrageous type of charges…. Are we getting into the dictatorship of banking system or is this still a democracy.

  51. parsonsdj1 says:

    Deadbeat, much?

  52. dvdchris says:

    Agreed, line of credit is far better to set up on your account than overdraft protection or just paying OD fees. WF charges me $10 to loan me $300 on a LOC at a competitive % rate (wayy better than credit card rates.)
    Have to admit this year I have used it numerous times as we live the new American dream of just getting by.

  53. PortlandBeavers says:

    For this particular customer the bank is acting against its own best interest by imposing the fee. They were cleaning up off this guy. He probably needs to go to cash only. Not because I somehow feel superior to him and want him to be “punished” by taking away his bank account, but because he will do a lot better that way. He can obviously come up with some money if he’s really motivated, and the $35 fees that aren’t being paid should go a long way in filling the gas tank and buying food.

    Anyone who thinks he was getting a good deal on the old plan should really sit down and do the math.

    By the way, my take on overdrafts is that they are a way of saving the embarrassment of a bounced check when you accidentally took your balance below zero. That’s just my opinion, though. I know a lot has changed since I formed that opinion.

  54. zibby says:

    “Wow, it’s going to cost TCF much more than that…”

    Not to be mean, but what does this guy think his business is worth?