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.

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