It's About Time! - Fed to regulate overdraft fees - from WSJ

[lauralana9]

I'm not saying banks should charge outrageous fees, but people should also be responsible for knowing how much money is in their checking account before writing a check or making a debit payment/ATM withdrawal. A checking account is not a credit card.

I completely agree. Not only that I will go a step further, I say they have the right to charge whatever outrageous fee they would like. It's their business they set the fees.

 

[LeesyUD]

I completely agree with this!! How in the world can you possibly "overdraft" your account? I keep track of every single penny that goes in/out of my account and have never, ever overdrafted my account. If you know you put in $500, you also know you can't spend $501, right? If you deposit a check, you know the check has to clear before the funds are available, right?

If you have a hard time keeping track of your account, then you should have an "overdraft account" linked to your checking account. When I was with WaMu many years ago, they had an "automatic savings" thing --- when your direct deposit from you job came in, they would automatically direct $25 of that into a savings account that was linked to your checking account and it also served as overdraft protection. I never needed the overdraft protection and the savings really added up over time.

I keep track of my account very well and leave extra in my account just in case of something that might be missed. However, with the economy and my husband only working part time we have to pinch our pennies alot more and have been living check to check.

We tend to use our debit card the most and make a lot of small purchase for $1 or $2 dollars bc we don't like to carry around cash. Because of our financial situation we have been struggling to pay bills and buy food, etc.

Recently we had 2 occasions where we unfortunately messed up. We check our account VERY frequently and despite our thorough balancing and tracking, we forgot about a charge or a check that we wrote on those two occasions.

Although the small charges (supposedly) went through on the same day as the larger charge or check went through, they charged the overdraft fees based on the smaller amounts charged. Between these two occasions we got hit with 7 fees for $39 each for a total of $483. This was all because of a total of $65 that was over drafted between the two occasions.

Although I understand it was our fault for over drafting obviously, that to me is just ridiculous and excessive. Most of those charges were from $1 to $3. We were able to get 3 of them taken off, but we still ended up losing $156 over $30 of overdraft.

Unfortunately, right now alot of people are pinching pennies, and there are bound to be people making errors. It just happens sometimes....people make mistakes.

I love my bank but I think overdraft fees have gotten out of hand.

 

[disneymarie]

I don't know that any of us expect to have the bank cover a $4 purchase of bread and milk if the money is not in there.
IF we get to the register and the money is not there, the card should NOT work.

NOT the bank, lift the mechanism that previously STOPPED the transaction, THEN NOT Tell us they did it, NOT give information to allow us to OPT OUT is the problem.

All of a sudden people living penny to penny now had a purchase go through of $4 and the bank lent them the money for only $39 and what is the rate of interet on THAT loan....

So now, the $4 will come out and the $39, When your deposit goes in The holder of the account NEVER new in advance of this situation so many other small transactions NOW go through....

The banks profited to BILLIONS over this last year.
They changed the terms of the checking account agreement people accepted when opening the account.

When we opened our account, we were informed some check deposited would take 2-3 days to clear and we understood that.
What if they did not disclose that, we deposit the check, there are now bills paid but all of a sudden we get a notice, oh you bounced every single check you wrote on that money,

We are now charging you $39 for every check....That is changing terms and to do that LEGALLY NEED to have an OPT out!

But, also even though I had an attached saving account, they did not use it.
No explanation except that I did NOT have it attached. I had to get a copy of the agreement. They ignored it, stuck by the I do not have one attached, and I have to battle them through the FDIC..

I am a little person, I can not afford a big attorney. The bank told the FDIC I did not have an attached savings.....and out of courtesy gave me a $200 credit into my account.

I mailed the copy of my signed document when I attached the accounts and it is still an open case.....
David trying to fight Goliath...they have well over a few thousand now of our money and we are both out of work.

Oh, and when I asked for the cards to be blocked,.....like I stated, they blocked it for ONE DAY!!!!!!


Conumers were taken advantage of during this practice and Banks have to be held accountable.....

If you do not have the money, then the card should not work.....PERIOD!
OR Inform of this WONDERFUL program that we will lend you the $4 and you only need to pay a fee of $39.

What is that 1,000 % interest?

 

[bumbershoot]

If you have a hard time keeping track of your account, then you should have an "overdraft account" linked to your checking account. When I was with WaMu many years ago, they had an "automatic savings" thing --- when your direct deposit from you job came in, they would automatically direct $25 of that into a savings account that was linked to your checking account and it also served as overdraft protection. I never needed the overdraft protection and the savings really added up over time.

Just so you know, since you never needed it...that little program was something I had on my account. Although right now I have NO idea how I ever got overdrafts, I have gotten them, so I know the following.

Even though it was connected to a savings account so it could be covered by ME, not the bank, they STILL charged for it. Maybe $20 instead of $25, but you were still dinged.


Whenever I read about overdraft protection on the Dis, it really seems that what some banks call overdraft protection is not what other banks call it. I've always had it, it just seems to come with the accounts I've had, but what MY banks have called o'd protection is that they'll pay the merchant and just charge ME.

But other banks (and even though I've banked in CA, WA, FL, VA, and SC I have never run into these programs) define it as protection from being charged after that happens. So strange.

I've even heard people refer to things like paying off their overdraft account? My banks have always required all their money inside a week, no "credit" given.



Anyway, I always read through what I'm agreeing to, so my accounts or charges have never been a surprise*, and all my banks have always explained and shown me where to find info about overdraft stuff, so I'm confused about why this rule is needed (part of is that they have to explain it...but my experience has been that they ALWAYS explain it) other than the "opt out" part (which I love).


*the only banking surprise I've ever gotten was in a situation where I deposited a check that was later bounced. Roomie paid rent. We live in the same town, banked at the same place (though our opening-branches were in different cities, mine was in Seattle from when I worked at wamu, she had opened her account in Tacoma). 2 weeks or more after depositing her check, they bounced her check. So she got smacked with the bounce fee, and I got smacked with a "you got duped so we're going to charge YOU" fee. Mysterious! Especially since it had been quite a long time, and honestly, they should have bounced it right then.

It was due to that experience that being charged for bounced checks, from isolditonebay, wasn't a surprise. And by the THIRD check they sent us (along with the "we bounced a check that you deposited so here's your fees" amount), we went to their opening-branch, sat with a manager, had him check their account and CASH the check right then and there...

 

[Tinkerbelle9980]

My bank charges the same fee whether they cover the check or not, so I am a bit confused here.
They will allow the check (or debit payment) through up to a certain amount (no overdraft protection loan) and they will charge $29 per check. After that amount they send the check (or debit payment) back and still charge $29 (I have never gotten to that point, thank goodness). I don't use the ATM so I have no clue what they do for that. So does this law change what they do?

If I mess up, I would rather pay the $29 and know the check will be covered rather than it be sent back. I would hate for my light bill to get sent back and come home to no lights!

The fee you pay when they cover the charges is the overdraft fee. That is because they are having faith that you will bring the account back positive. Most banks have a limit for customers depending on a number of factors.

The fee for when they return the check is an NSF(non-sufficient funds) fee. Just meaning it isn't being covered.

I don't understand why the fee is the same for them usually. If they are returning the item they should charge a smaller fee say half the amount of an overdraft fee. I understand they still have to process and return it, but a smaller fee would go a long way toward customer satisfaction. Just my opinion.

 

[NYCDiane]

I also live paycheck to paycheck as many people do (working on that with Dave Ramsey, though!).

However, I check my account first thing every morning and last thing every evening. If I make debit card purchases, those receipts are in my wallet and are entered into my ledger the moment I get home. I'm not going to pay the bank $39 because I screwed up and forgot to deduct something from my running balance -- or, worse yet, pay the bank $39 and a company another $39 for a bounced check. It's just not happening in my world.

I work entirely too many hours and much too hard to give my money to the bank because I screwed up and didn't keep track. You can't say "oh I forgot" or "it was only a $2 purchase" or "I'm too busy"..... if that's the case, then only ONE person should be in charge of debit cards, banking, etc and keep a close track. The other person would have to come to the one in charge to make a purchase or use a card. Better yet, use CASH -- this way you can't spend what you don't have and you'll find yourself actually spending less when you see those greenbacks dwindling away in your wallet.

 

[NYCDiane]

I don't know that any of us expect to have the bank cover a $4 purchase of bread and milk if the money is not in there.
IF we get to the register and the money is not there, the card should NOT work.

NOT the bank, lift the mechanism that previously STOPPED the transaction, THEN NOT Tell us they did it, NOT give information to allow us to OPT OUT is the problem.

All of a sudden people living penny to penny now had a purchase go through of $4 and the bank lent them the money for only $39 and what is the rate of interet on THAT loan....

So now, the $4 will come out and the $39, When your deposit goes in The holder of the account NEVER new in advance of this situation so many other small transactions NOW go through....

The banks profited to BILLIONS over this last year.
They changed the terms of the checking account agreement people accepted when opening the account.

When we opened our account, we were informed some check deposited would take 2-3 days to clear and we understood that.
What if they did not disclose that, we deposit the check, there are now bills paid but all of a sudden we get a notice, oh you bounced every single check you wrote on that money,

We are now charging you $39 for every check....That is changing terms and to do that LEGALLY NEED to have an OPT out!

But, also even though I had an attached saving account, they did not use it.
No explanation except that I did NOT have it attached. I had to get a copy of the agreement. They ignored it, stuck by the I do not have one attached, and I have to battle them through the FDIC..

I am a little person, I can not afford a big attorney. The bank told the FDIC I did not have an attached savings.....and out of courtesy gave me a $200 credit into my account.

I mailed the copy of my signed document when I attached the accounts and it is still an open case.....
David trying to fight Goliath...they have well over a few thousand now of our money and we are both out of work.

Oh, and when I asked for the cards to be blocked,.....like I stated, they blocked it for ONE DAY!!!!!!


Conumers were taken advantage of during this practice and Banks have to be held accountable.....

If you do not have the money, then the card should not work.....PERIOD!
OR Inform of this WONDERFUL program that we will lend you the $4 and you only need to pay a fee of $39.

What is that 1,000 % interest?

I think what you're failing to realize is:

1. You shouldn't be writing checks or making debits until the check you deposited clears and the funds are available.

2. It's YOUR responsibility to keep track of your account, not the bank.

3. If you mail a check on Monday, chances are the company you're mailing it to won't get it and process it for 7-10 days. In the meantime, that money is sitting in your account. If you swipe your debit card for more than you have left in your account (after you've written the check), of course it's going to work. The bank doesn't know you've written a check for $_____ and it's in the mail.

4. The $29 or $39 fee is not "interest"... it's a penalty for you overdrafting your account and making the bank do more work.

5. Banks are in the business of making money just like any other business. It's up to YOU to determine how much money they make off you. Read every single letter, post card, paper you get from them. Open all your statements and make sure there are no "notices" on them. .

6. Common sense should tell you that if you have insufficient funds to cover a transaction, then DON'T do the transaction! Check your account and make sure you actually have money before spending it.



I don't like the large bank fees, either.... I think $10 per insufficient funds transaction or bounced check is sufficient... .but you can't blame everyone else for your own irresponsibility. I keep a marble notebook for all my accounts. Every single deposit, debit, direct deposit, money transfer, online payment, telephone payment etc gets logged in there the moment it happens. I refuse to overdraw my account because I don't need the aggravation and I definitely don't need to pay my bank $39!

 

[lauralana9]

In all honesty though, isn't that better than all of these "gotcha" charges. I feel the same way about what the airlines are doing. Charges for baggage, aisle seats, fuel surcharges on and on. It sets up an adversarial relationship with your customers from the get-go. Just charge a flat fee where you can actually turn a profit.

I defiantly like the system we have now. I do not want "fee checking", would much rather have the fees if I mess upp. I have been with my bank for about 16 years. In all that time I have had one bounced check. at the time is cost me $27. I still remember it because I was pissed at how stupid I was for not keeping good enough track, and its never happened again.

That works out to about $1.68 a year it has cost me for my bank account. That seems like a pretty sweet deal to me. It is costing them money to have me as a customer. If they do away with all of the fees we will run into a problem with bank accounts like we have with credit cards this year.

The second the government stepped in and said they were going to regulate it even more the fees shot up. Cards were canceled. I had several cards that I have had for years change their fee structure drastically in anticipation. One doubled my min payment, it went from $150 to $300. If people would pay attention and/or take responsibility for *their* mistakes rather than cry and run to the government to "make it all better" I seriously doubt all that mess would have happened. They need to stop meddling.