Democrats Target Bank Overdraft Charges

[cal04]

Source: Washington Post

Bailed-Out Firms Lean More Heavily on Fees

A backlash is brewing on Capitol Hill against banks that charge large fees for overdrafts without asking or telling customers, the latest sign that the financial crisis is shifting the balance of power from banks toward borrowers.

Banks struggling to survive have become increasingly reliant on the fees, which could total $38.5 billion this year.

But congressional Democrats, who pushed through new restrictions on credit cards this spring, now are promising a crackdown on overdraft fees, using words like "criminal" and "rip-off" to describe the practice of letting people overspend and then charging them fees without warning. Most overdrafts are now incurred on debit card transactions.

Sen. Christopher J. Dodd (D-Conn.) plans to introduce legislation requiring banks to get permission from customers, rather than allowing overdrafts automatically. If customers decline and then try to overspend, the transaction would be rejected. A similar bill is pending in the House.

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/09/20/AR2009092002879.html?hpid=topnews

[shanti]

1. this is such a no-brainer

screw the banks.

[WestSeattle2]

99. Why, why, WHY do people still use commercial banks?! For

godsakes, switch to credit unions. Commercial banks are just as immoral as health insurance companies, but at least with commercial banks you can tell them to go to hell. Move your money to a credit union.

[PatrynXX]

2. Once upon a time the card would be declined

Then I'd get nailed somewhere else, but that was far cheaper than what it is now. Regions bank (badregions.com) does the transactions top down. So they do the biggest charge first. Before the credit comes in. Found myself over $150 in overdraft fees. Even if the credit was deposited long before I even bothered to charge. Charges come before credits. hence the site badregions.com which is actually Am South. Regions was just fine until Am South took it over. Before that it was Union Planters Bank. And they were very nice. My local branch has a bunch of pissed off employees because Regions has blocked their atm from doing any deposits. More work for them. Foul. Hope they go after them. Lost a good chunk of money with them. Heard horror stories much worse than mine.

[grasswire]

7. a teenager in our household last year...

...had her first bank account with a debit ATM card. She ran up more than $500 in overdraft fees in a very short period of time by just buying fries or a milkshake after she was overdrawn. The debit was approved ($3 or $4) and then she was slapped with another $35 bank penalty. Yes, she should have known better. But it would have been much better to deny the debit. Bank of America doesn't allow that option choice.

[tinrobot]

9. Neither does Wells Fargo

[beltanefauve]

22. Wells Fargo has a different scam, though

I have a Wells checking account and a Wells Visa card. To pay my Visa bill, I tranfer funds from the checking to the Visa account, but Wells holds my money as a "pending" transaction, even though my transfer involves money from one Wells Fargo account to another, and has charged me an overdraft charge while my transfer is floating. Nice.

[INdemo]

30. this happen to me and I called them on this and after two days

they finally credited my account.
Here is the deal with that..if you find that there will be a deficit transfer money before 2:30 PM ..
I dont expect Congress will get any thing accomplished on this.. Its just political talk

[FBaggins]

45. No offense intended, but

the real "deal with that" is to transfer the money before you write whatever check it was that caused the overdraft.

[beltanefauve]

80. Thanks for sharing

and welcome to DU, I think.

[Raster]

96. You have every right to be cautious. My spider sense says "banking industry shill"

[lakercub]

56. Wells has an even better scam now

I have overdraft protection attached to my checking. Essentially, it's a line of credit. I go into it all the time and then pay it off all the time. Well not any more. Now, if I don't transfer from the overdraft account myself...they charge a ten dollar fee to do it (it's free if I do it). In other words, a transaction that takes place entirely electronically that requires no labor whatsoever (the software code to do this was written years ago and has been thoroughly paid for by existing fees) costs ten dollars just because they want it to. If I do it myself...it's free. If their software does it automatically, it's ten bucks.

The other thing I like is that they used to transfer in increments of 100 dollars from overdraft to checking. Now they do it in increments of 300 dollars, thus ensuring my interest payments on the line of credit will be higher.

I will be switching banks soon. This fee was the last straw...they already have so many other fees that I just can't take it anymore.

[CrispyQ]

67. I hate WF.

Last fall my overdraft account had a balance of approx $150. I made a $100 payment, but I accidentally checked "principle only" instead of "regular payment." Because no interest was paid, my $50 balance went into arrears & they stopped covering my debit charges. By the time I got my email notices, two days later, WF had already hit my account with five overdraft charges of $39 each, plus a late payment fee on my overdraft account of $35. While I admit that the mistake was mine, IMO, getting slammed for $230 in overdraft/late fees, on a late interest payment on a fifty fucking dollar balance, was way over the top. :grr: :grr: :grr: :grr: :grr:

I'm also extremely pissed about the auto $10 charge. Fuckers. They are fucking blood suckers. :grr: :grr: :grr: :grr: :grr:

I would love to move my money somewhere else, but I don't know where the terms would be better or the bank any safer.

[zonkers]

62. Both WF and B of A worked us over at different times in different ways. Hate them both but

WF is a safer place to keep money than most places. Not in danger of going under anytime soon.

[Seldona]

89. Utilities are doing this as well.

We went down and paid a bill on the due date, at the local office where they will collect their payments. Next month there is a large late fee tacked on, I call the company, and am told you have to pay your bill a week in advance of the due date, as it takes a week to process.

There is no place on the bill, or anywhere else I can find, about this practice. I wonder how many people just pay the bill and never know they are being socked with late fees every month for paying their bills on time? I wonder what that does to one's credit?

I wouldn't pay the late-fee, so now they are going to cut us off. I don't care. I am still going to fight this. Seems like theft to me.

[Skittles]

17. it's one thing to slap a fee on someone for a mistake

it is entirely another to absolutely gouge them - that is a shakedown, that is theft - it needs to stop

[grasswire]

19. there was a thread some weeks ago...

....about writing a letter to the bank telling them you will be reporting them to the Better Business Bureau for shady business practices unless those penalties are reversed. Apparently that has been successful for some.

[Skittles]

21. good idea

I'm fed up with people blaming the fees on fiscal irresponsibility - reasonable fees are legitimate - shakedowns and practices that ENCOURAGE heavy fees are NOT

[truedelphi]

11. Until the 1999 Banking Reform Act, the smaller chargers were REQUIRED to

Post first. Then the larger ones.

But the wonderful Banksters got together and said, "Well, as a CONVENIENCE, we should see that the larger checks get processed first. For who would want their landlord's check to bounce rather than their numerous smaller checks?"

So as a CONVENIENCE (OR SO THEY SAY) they process the larger checks first.

Fie on them.

[FBaggins]

32. It actually made sense at the time

People used to come in to the bank and complain that we had paid the pizza guy and the dry cleaner but bounced their mortgage check - which results not only in fees on the other end, but a potentially damaged credit score that costs for more than the overdraft fees in the long run.

[Raster]

48. How do you know people "used to come into the bank and complain"?

Bullshit. Don't even try and make this a case of the "banks just trying to do us a favor." They were not. They wanted to be able to jack up their fees. That's why they're getting called on the carpet.

And for the record, I've examined their policies THOROUGHLY. I've also requested that my debit card be declined if there were not enough funds. The bank refused.

[FBaggins]

49. Because I've been in banking for more than two decades.

They weren't "just trying to do you a favor"

They realized that both options had advantages and disadvantages for roughly the same number of customers and one resulted in more fees. Pretty simple.

As for your request... of course they refused. It amounts to a request for them to manage your spending for you. There is no need for such a request... just don't spend money you don't have.

[Gormy Cuss]

97. That's honest. Banks figured out that this way makes them more money.

Somehow I doubt that Gramm-Leach and Check 21 were passed without a considerable amount of favorable positions inserted at the behest of banking industry lobbyists. It's time for Congress to slap back the balance towards consumers.

Your advice about not spending money that you don't have ignores the favorable use of Reg CC to hold deposits much longer than necessary in the electronic age and how that has an impact on customers who SHOULD have the money available but don't because the banks are using it for a few days to bolster their own profits. For those of us who don't live paycheck to paycheck, the float's no big deal, but for a lot of people the difference of a day or two means the choice is don't pay the bills on time or pay them and get hit with massive fees even while the total in their accounts would easily cover the checks.

Oh for the days of Glass-Steagall..

[high density]

34. If I had $800 in my account, a check for $800 rent posting and a check for $20 to the grocery store

I think I'd want the grocery store check to bounce. But then again I have never been in this situation since my account always has sufficient funds to clear my debits. Yet everybody is screaming that they'd really want that grocery store to be paid in this situation, which I find is rather hard to believe.

[FBaggins]

43. You would. And that makes sense... but

What if you had $850 dollars in your account and checks cleared for $800, $75, $55, $45, $35 and $10?

Pay the little checks first and the mortgage check bounces (one fee).

Pay the largest checks first and the mortgage check gets paid and five checks bounce (five fees).

In reality it appears worse (IS worse depending on your perspective) because the bank likely pays all of the checks in either case... so it's just a question of how many fees they charge.

It gets even worse when the following days see lots of small checks that might have been fine if it weren't for $150+ in overdraft fees. The snowball just keeps rolling down the hill.

The bank, of course, is correct. It's your responsibility to not spend money you don't have. It wasn't so many years ago that they would have bounced the checks (getting you charges on both ends) and you would eventually have legal problems for writing bad checks.

Of course that doesn't make it suck any less. :-)

[Raster]

47. So which bank do you work for?

The checks should clear in the order they are presented BY TIME, not structured by the bank to produce the most fees.

[FBaggins]

50. That's simply not possible

They have no idea what time checks were presented (in most cases of course). They can only tell what banking date they arrived for payment.

As for which bank? Don't get me wrong... I'm proud of this company. It's one of a handful that hasn't been involved in the current mess ... but I'm not here as their representative and can't speak for them so I won't name them.

[Raster]

95. Banks should post checks to an account IN THE ORDER THEY ARE RECEIVED.

NOT the order that most benefits the financial institution. Please don't tell me a bank has no idea when checks are presented for payment against my account. That is, in a word, bullshit.

It's called "stacking," and Wells Fargo is one of the worst.

[FBaggins]

103. You can call it whatever you like... But you don't know what you're talking about.

It simply isn't possible.

The vast majority of checks come in through transit at different times
of day and are scanned in batches of thousands upon thousands. The bag from your branch doesn't get separated by the time of the transaction (nor could it be and bags from the branches are mixed in (by processing time) with transit items.

If this is a big bank they probably get all of this done for one state or region before moving on toward others.

All this gets mixed in with some check24 transactions that may go through much faster than you expect... Or a check that gets converted by the vendor into an ach debit and posts right away... And on and on and on. Of course they know to the second when you take money out of an ATM or some of your pos transactions, but the long and the short of it is that there is no way they can post your transactions in the order they arrive or the order you created them.

[intheflow]

3. Yea!!

This is my dream come true! :bounce: Those fuckers have been killing me for ages with that overdraft scam, it's not as new a practice as the CM would have you believe. They've just caught on now that the rates have been escalating in the last year. But it was really fucking bad before that, for us poor people.

[high density]

35. Is there some reason why you are willing to let the bank make you even more poor with stupid fees?

Why do you need a law like Dodd has proposed to effectively protect you from your own actions? When you get an overdraft prompt at a POS terminal, are you actually going to decline the transaction or will you continue to spend the money and rack up the fees?

[fasttense]

42. All the law is doing is making it a requirement to ASK the customer before they

extend you a loan and charge you a fee.

I have always used a Nationally known Credit Union but when we moved to a small town, no one would take my checks from my out of state bank. So I opened 2 accounts at a local bank.

I forgot to list a large check one day and I wrote 3 checks that bounced on my checking account. I had deposited sums that would have covered the amount but because the deposited check was from an out of state bank, the local bank was "holding" the large deposit for 3 days, supposedly to see if it would clear.

I didn't know it until my statement came in a month later. Since my "held" deposited amount had cleared, it covered all the costs but I was out $150. I also had the money in my savings. I had no idea I could link my accounts and even after arguing with the manager.

But a call or a comment from the bank would have saved me $150.

I bet Bill Gates or his accountants get called to move money around when one of his accounts are erroneously calculated.

[FBaggins]

44. Really not possible

Do you realize how many scores of such occurances each branch would have to call on each day?

I suppose we could go back to the old days and they could just bounce the checks.

I think that people would quickly decide that THAT was the greater inconvenience.

[intheflow]

53. I call bullshit.

It's not like they're not entering those held checks into their account. When they place a check on hold in their system, an automated phone call, text or email could go out to the customer. They don't need an actual person at the bank to call people.

[FBaggins]

55. Feel free to call it what you like... but I'm not seeing it.

How much time do you think there is between posting and when they need to make a call on whether to pay or bounce the check?

Either way it would only make that difference (pay or bounce), it wouldn't change the fee... since the fee is for the overdraft... not for the returned check.

How about this. They will make a system available for FREE that will make such information available to you 24/7 by PC or phone. Would that help? :-)

Alternatively, you could just do what your parents and grandparents did and actually keep track of your money. :)

[droidamus2]

66. Missing one point

The point you miss there is the cases of where the banks have structured how they schedule debits and credits to make it more likely those that live pay check to pay check will overdraft not because they don't have the money but because the transaction to cover the debits is still floating around waiting to be 'verified'. If you have noticed the only time banks want to allow 'float' is when it is to their benefit. Through the years whenever customers figure out ways to use float the banks are quick to close the loophole or even make it illegal if they can.

[FBaggins]

76. No... I'm sorry.

And truly I don't mean to sound abrasive. But that's not really the case.

First of all, the "verified" really isn't the case (unless you're talking about something else). You deposit a check today and it takes a little time before the bank actually gets the money for that check.

It all comes down to a very simple fact. If you have checks clearing today and there's some deposit being "verified", then you wrote that check before there was money in your account. You likely wrote it before you made the deposit. It used to be clear that you weren't supposed to do that. Your comments on the float imply that it's no longer quite so clear to many.

[droidamus2]

65. Not always

You have a point on checks but with debit cards why not just not allow overdrafts. If the money isn't available in the account to cover the transaction at the time of the transaction then don't allow it to go through. Another option would be to modify the banks ATM software (bigger problem with 3rd party ATMS) to allow you to override for a "reasonable" fee (I would limit the number of times you could do this in a given period like a day, week or a month). I would suspect it would also be possible to automate the calling to where when a bank received an overdraft and entered it into the computer it automatically generate a 'robo-call' that simply informed you that your account was overdrawn.

[FBaggins]

77. That's certainly an option...

...but I'd bet that you would have some of your other customers pretty ticked off at that.

Having your card declined in public isn't always more attractive than a fee. It's also the case that you can make lots of little transactions in the day and have a check post that night (that was written days before). Those little charges still overdraw your account (and have ugly fees) but the ATM couldn't know about it to warn you. The point here is that there is simply no way to transfer responsibility for managing your account onto someone else's shoulders. All of these supposed "fixes" merely nibble at the edges of the problem.

In most cases, you have a far Superior option. Tie your checking account to savings or a line of credit. Then you get either that far lower fee or just pay interest for a short period of time.

The problem here is that not everyone has any savings... or the credit necessary to qualify for overdraft protection.

[FBaggins]

82. Ok... here's a proposal from a career banker.

It seems to me that the most egregious fees here (and thus the easiest to "sell" to the public) are the full overdraft fees ($35-$40) charged on tiny overdrafts. You overdraw your account with two $5 POS charges and end up almost $100 in the hole with the fees (which means that your next deposit doesn't bring you up high enough to cover the next checks and the cycle begins again).

The proposed fix doesn't make much sense to me. It doesn't keep you from overdrawing the account except in those very limited situations and it just opens up a raft of new service issues like when you have $50 so the POS goes through but there's a check (or ACH or other transfer) that posts that same night anyway. People will still be overdrawn... they'll still be ticked off... and now they'll complain that the bank is breaking the new law.

So how about a simple fix?

Limit overdraft fees to the amount of the item.

You used your Debit card for breakfast lunch and dinner and McDonald's? Instead of $3, $5, $6 and three $35 charges... now you've for $14 in fees. Still enough to discourage irresponsible money management, but it won't bury you.

[droidamus2]

64. How about this

Yes I know the banks would never voluntarily do this but how about this. If the banks are going to pull that BS that they have to hold a deposit for x number of days to see if it clears (when I bet dollars to donuts they can electronically verify it as soon as it is entered into their system) then they can't process anyother transactions for you until the money is added to your account. By this I don't mean that you couldn't use your debit card or cash checks it just means they would suspend processing them until the incoming cash flow is verified.

[intheflow]

52. There is no overdraft prompt at POS.

I use my debit card. I was told when I opened the account that if I used my debit card (as opposed to using my debit card to do a credit card transaction), if I didn't have the money, the sale wouldn't go through. It wasn't until I'd been whacked with over $300 worth of fees once that I went storming down there and was informed that their policy had changed, hadn't I read the microscopic fine print in flyer they sent with my statement? :grr: So yes, back in the day before they stopped actually prompting customers when they had insufficient funds, I didn't go through with the sales. But the banks got all sleazy and did away with the prompt. The catch-22 is that you think you have $20 in your account, but really, you forget that $19 you spent on gas on Friday, so you do three different transactions ($1.50 coffee at 7-11, $4.00 for a couple pieces of fruit for lunch, and maybe $1.50 later in the day for another coffee. Suddenly you have three separate $40 fees so what should have cost you $7 ends up bilking your bank account of $127.00, and the overdrafts accrue within a matter of 2-3 hours. It is complete and total bullshit. Even Gilbert and Sullivan would agree: that punishment from the bank does not fit the alleged crime of being overdrawn.

Meanwhile, my ex-BIL was really rich, and when he had an overdraft, the bank fucking called him and asked if he'd like them to transfer money into the overdrawn account from some other account. So the rich guy didn't have to worry about POS declines even when they did them because the bank took care of him.

[CrispyQ]

69. "...the overdrafts accrue within a matter of 2-3 hours..."

But the emails they send you, to notify you to the fact, come two days later. :grr:

[high density]

75. No, they never promped at POS. Dodd wants to add that.

Why didn't you know how much money was on your account? It seems that simple information would have let you avoid $300 in fees. A feasible fix would be to have the banks let people opt-in to have these transactions be declined instead of using overdraft protection. It seems that would be a lot easier/cheaper to implement than what Dodd has proposed.

[intheflow]

84. Once upon a time, it did prompt at POS.

The whole idea of debit cards was that you didn't have to write a check, so you'd never overdraft because it wouldn't let you pay for anything unless you had actual money in the account. That's why it's linked directly to your account. The code used to be in the POS programming, I don't understand why you think it's going to be wildly cost prohibitive to go back to it. Especially as a consumer protection safe guard.

[FBaggins]

86. A few corrections

It wasn't that they "prompted" you, it was that they were true "debit" cards. It was one step evolved from the ATM card and it could accept/reject your transaction based on the balance because it checked your account through the ATM network... though it would be a big stretch to say that this meant you "couldn't overdraw your account", let alone that that was part of "the whole idea" in creating them.

Just a few years later, the cards began to be added to the Visa/MC networks so that more merchants could accept them. That changes things, because many transactions aren't even verified back to your bank and can take a couple days to post.

I don't know how much it would cost to go back to the stricter level of balance verification, but I can tell you that the cost/inconvenience would be born both by responsible clients who never overdraw their accounts and those who the idea would supposedly help.

[intheflow]

88. You're right about the "true" debit cards bit.

But I disagree about the "whole idea of creating them" and the inability to overdraw. Because that was exactly how it was sold to me. If that's not what was being said behind the scenes in the banking industry, and I see in another post of yours in this thread that you have been a banker, that just underscores all arguments that banks are sleazy, dishonest businesses purposefully designed to obfuscate and swindle their customers.

[FBaggins]

93. With respect,

there's a difference between what "sold" you on getting the card and how/why they were designed. There are lots of features/benefits to such products and some are more attractive to some people than others. If "never be overdrawn" was on the list... it was nowhere near the top.

I've never seen a list of benefits that even included anything like "avoid overdrafts because we won't let you take money you don't have" (and I used to write such training pieces), but I admit that perhaps my bank is different. As I said, they really can't make that promise because they don't know what other transactions can hit your account on the same day. The original ATM cards wouldn't let you withdraw money that you didn't have... but you could still be overdrawn due to a check presented earlier that day that didn't post until midnight... or a gym membership automatic debit that you assume had already posted... but hadn't.

Regardless, we have to agree that almost all such stories boil down to a consumer that doesn't want (or perhaps know how) to keep track of how much money they have. They want a magic talisman that will limit their spending for them... and no bank can provide such. Anyone in such little touch with their finances isn't going to remember the check they wrote a month ago to the Unite Way that just hasn't cleared yet.

The long and short of it is that it smells of "I can't be out of money - I still have checks left" - We can't fix that by passing legislation. If hundreds upon hundreds of dollars in fees can't slap someone into watching every penny... then no call/email/notice legislation is going to fix that. I read an article on this subject who claimed that he figured he had paid between $2,000 and $3000 per year in such fees over the last few years. He too felt a righteous indignation that someone was supposed to stop him before he spent again. Something in him knows that that next movie rental... next beer... next ebay purchase (whatever) was going to cost him much more than the face value... but he couldn't stop himself. No legislator should think that WE can.

My proposed fix (which I now realize was in reply to myself so nobody likely saw it) is to limit overdraft fees to the amount of the item posted. A $5 charge shouldn't cost to $40 in fees. I'll amend that to say maybe we should also limit overdraft fees on overdrafts that are smaller than the amount of overdraft fees charges in the last seven days (or whatever). That way you won't pile up more fees just because you didn't account for fees you didn't yet know had been charged.

[laughingliberal]

102. I am certain if your policy was instituted they would return to posting the smallest items first

That way, in the example cited above, the $850 check would bounce and your charge would be $850.

[FBaggins]

104. Lol... I like the cynicism

But I meant for smaller transactions . The bigger checks would still get the standard fees. As much as I'm sure they would like to... Any bank that published a fee schedule with $800 overdraft fees would lose their customer base.

[SOS]

58. Just give us the option

Dodd's bill is excellent and deserves immediate passage.

If you want this "service", that's great.
If not, let the customer drop out and get the decline at the POS terminal.

Why do these "free market" banks want to deny us consumer choice?

[high density]

72. The option isn't free

All of us, even those that do not utilize overdraft protection, will end up paying for the infrastructure changes that would be required under Dodd's proposal. They will recoup those charges with higher interest rates on mortgages, lower rates on CDs, savings, etc.

I do not need this option. I simply do not overdraw my account.

[SOS]

91. How much does it cost to decline a card?

When a credit card is unpaid or over-limit, they seem to be able to decline it in a nanosecond.

And if it costs $5 billion to upgrade the software, they've still got $33 billion in debit fees left over for bonuses and golf outings.

[laughingliberal]

101. Yep, I would decline the transaction

and then call the bank to find out what's going on cause I have never overdrawn except on some rare occasions when I made a miscalculation. I would way prefer that to the $35 charge.

[DJ13]

4. Its a start, but until they cap credit card rates its not enough

[defendandprotect]

5. Imagine how much they've made on this criminal activity . . .!!!

[jimlup]

6. Sorry to be the barrer of bad news but...

This won't fly. The blue dogs and repukes who are in the pockets of the financial institutions will block it.

They will take EVERY LAST DROP until we actually fight back for real. That will mean general strikes and labor shutdowns. It won't be pretty but I'm sorry to say I think democracy is failing in America.

[Lorien]

81. What Democracy?

that ended long ago. The corporations pick our candidates and we're given the illusion of choice.

[jimlup]

98. Yep...

I realized this after I had made the post. But I do believe that unless we fight back for real we are going to take another big step towards corporate slavery.

[mzmolly]

8. I APPLAUD this greatly!

I think they should limit the weekly amount of fees that can be charged as well. Most people don't know their overdrawn, as it's due to an accounting error and ... they end up getting notices days later! At which point, they can't catch up financially. It's criminal.

[Skink]

10. As long as we can still take loans against direct deposit.

:)

[Name removed]

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[Name removed]

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[AlbertCat]

14. How about managing your money properly

It's not as easy as balancing your checkbook. We're talking about a check card. If one does not have money in one's checking account, why is the transaction approved on the card?

No one has asked the bank for a loan. If you didn't have enough in your account and went into the bank to cash a check, would they cash it? A check card is not a credit card. Why are banks pretending they are?

[Lydia Leftcoast]

15. Well, I DO blame banks for suddenly charging unidentified "miscellaneous fees"

at the end of the month unannounced and in just the right amount to make the account overdrawn after all debits are paid, then charging the overdraft fee BEFORE the relevant charges come in. (I'm looking at YOU, Citibank, o recipient of bailout money.)

In other words, if the bank were not playing stupid fee tricks, the statement would look like this:

Balance: $61
Charge 1: $15
Charge 2: $30
Balance: $16, at which point I would stop spending till more money came in



Here's how the actual statement went:

Balance: $61
Miscellaneous fees: $11 (unannounced and unexplained)
Overdraft charge: $35 (Note that I still have $50 in my account when this is levied.) Balance: $15
Charge 1: $30 Balance: -$15
Charge 2: $15 Balance: -$30
And what do you know! This triggers another overdraft charge: Balance -$65

And that was the end of my 12-year-old Citibank account, which I originally opened in the mistaken belief that it would make it easier to receive wire transfers from overseas. I sent them the $65 in an envelope along with my debit card cut into the tiniest possible pieces and an angry letter.

[comtec]

16. I have so been there

it's utter bullshit!
"Oh but we NEED fees" why?
Banks by their nature should be ZERO SUM institutions.
The ONLY money they should be allowed to make is on loans.
And let me tell you, looking at MY loan, they make a FUCKLOAD of money at that!

I could probably start and fill a server with a blog/forum ONLY going about the evils of banking!

It's the biggest scam in the world... and we're all pretty much stuck buying into it!

[skepticscott]

25. So if banks

provide no service that is of any use or value to you, why do you use them?

[comtec]

28. don't hurt your groin with that stretch!

I never said they have no value.
obviously, in my statement I pointed out the necessary evil that banks are.
we can not run a cashless society without them
we can not - safely - hold onto large sums of money without banks.
but Credit Unions magically found a way to provide good, honest service with OUT raping their clients.
so what is your issue with people finding banks to be completely fucking evil?

me thinks thou doest protest too much.

[FBaggins]

83. Lol... no. You didn't say that they had no value...

...just that there wasn't any value you were willing to pay for. :-)

[skepticscott]

90. The service they provide

is either worth it to you or it isn't. If it is, then you have no reason to complain. If it isn't, then don't pay for it, and you will also have no reason to complain.

And if Credit Unions are so magically wonderful at providing far superior service at far lower prices, then use one. And if you're going to tell me there isn't one around, ask yourself why not, if they are so superior. And please, don't tell me that it's part of the evil Big Bank conspiracy.

[Lydia Leftcoast]

38. If they're going to suddenly charge fees, they should provide a service in return

I understand paying a monthly fee for maintaining a checking account. But when the bank suddenly ADDS new fees (not raising the checking account fee after a month's notice, not providing new services but transparently trying to trigger an overdraft without warning, as in my example), then they're playing crooked.

I'm in business myself (free-lance), and I do my work for an agreed-upon rate. If I fall short at the end of the month, I can't go back to my customers and say, "You know that $200 job I did for you? It's really $500, because I need the money." No, if I want them to pay me extra, I have to do something extra for them.

[CrispyQ]

70. How do they possibly justify the first overdraft charge?

???

They are fucking blood suckers.

(We need a flip-the-bird icon for threads like this. The :grr: just doesn't quite convey my feelings.)

[Wednesdays]

31. Yeah! Increase the penalty to $200 per overdrawn item!

That'll REALLY teach everyone some personal responsibility! :spank:

[Bill McBlueState]

54. "People used to take responsibility for themselves."

Link, please?

[SOS]

59. New Law: uncollected/insufficient funds = decline at point of sale.

Is that too hard for you to understand?

Why do you want to deny customers the choice of which services they want or don't want?

[Lithos]

18. The real question is...

How are banks suffering in this economy when they basically can impose whatever charges they want, impose whatever interest rate they want and can make sure you never are in a position to drop their debt.?

Got to be some might sloppy work on their part if they can't make a profit. Makes me wonder just how badly they are messing up on other things - how bad their investments and portfolios are. That kind of risk is exactly related to the loosening of the banking rules where banks now think they are "investment houses" and now investing in things that most people wouldn't touch with a ten foot pool and wouldn't want their money associated with - if they had a choice.

L-

[mduffy31]

20. My grandfather was a banker

...he retired as the VP of a small local bank where I grew up. Now having a fee for an overdraft charge does make some sense, but the amounts that are being charged are criminal. $35 for a person who is .87 overdrawn is ridiculous. That is what I was once so a movie that I went to ended up costing me $50 and the movie sucked.

[dotymed]

23. What about

the people who have to have a short term "loan?"
They turn to pawn shops or "payday loan companies."
They pay about 600% A.P.R. These companies charge handling
and/or finance charges to get around their usurious fees.

[CrispyQ]

73. This should be addressed as well. --nt

[boomerbust]

24. How about this one

My total income is deposited foutth Wed. every month. The bank charges $1 a amonth for debit card. A few months ago I thought I had the balance right down to the dollar including the dollar charge for debit card the day before the first of next month. Miscalculated by .10 and was charged $31 overdraft fee for being 10 cents short on a dollar transaction.

[Turbineguy]

26. Back in the days.....

when your bank would call you to tell you you needed to hurry in with a deposit to cover a check.

They paid 5% interest on passbook accounts.

That was Bank of America.

And that's why it was the Bank of America to me.

[indimuse]

27. it's about time!!!!!

Is exactly why I closed my acct with BOA! :kick:


KNR!

[Jacobair]

29. Very good news.

They should credit the overdraft as payback for all of the money the customer/taxpayer has loaned (bailed out).

[high density]

33. Permission?

Permission is granted when the customer opens an account and accepts the policies for overdraft protection. It is then up to the person using the account to make sure they are spending money that they actually have. I think Dodd's idea is going to lead to spreading this fee to everybody else for the cost of upgrading the infrastructure to allow such a thing.

[CrispyQ]

74. What upgrade of infrastructure?

When I pull money out of the ATM machine, it prints my balance on the receipt - the balance after my withdrawal. Checking the balance on the acccount could easily be done at the POS during the authorization process & if you don't have the funds, you don't get the goods.

[Joe Chi Minh]

36. The Royal Bank of Scotland, the Halifax BoS and, I think, Lloyds drastically reduced their

overdraft charges in the UK, last week. Nice to see the effects of globalisation hitting the big guys for once, to the benefit of the little guy.

A clear reversal of the normal neoliberal economic order. I expect it will be a fair old while, before they feel the benefit of any trickle up effect from the peasantry, but at least it makes revolution less likely.

King Louis XXVI of France to the Duc de Liancourt: "Mais, c'est une revolte?" (But, is it a revolt?)

Dukey ("de maniere visionnaire", as someone put it): "Non, Sire. C'est une revolution!" (No, Sire. It is a revolution!)

I think it was after the fall of the Bastille.

[Kingofalldems]

37. Excellent---I wonder where the repubs stand on this

issue.

[Rosa Luxemburg]

39. perhaps the banks' fat cats could take a reduction in salary

[Bluenorthwest]

40. Dodd better dance faster and better than that!

He's about to be a movie star!

[JamesJ]

41. Somethng you might not know about Chase

I recently got a $43 overdraft charge from Chase. I've been their customer for many years so I called and complained about the amount. The rep removed the charge and told me that they are allowed to remove an overdraft charge one time a year if a customer complains.

It's crumbs but if you're a Chase customer worth making the call.

[fjc]

46. Even if you have savings to cover it, they charge you.

[quiet.american]

51. Notice how the second-paragraph sentence tries to whip up sympathy for banks.

Banks struggling to survive have become increasingly reliant on the fees, which could total $38.5 billion this year.

Closer to the truth:
"Banks have become increasingly reliant on this scam, which could pull in $38.5 billion this year."

[Skink]

57. How come if you are a day late on a credit card they charge you 40 but the electric co says 2 weeks

and add a dollar to the bill. Or your car loan says late on your payment add 10 dollars? Just sayin and I think when they changed the practice of declining debit for insufficient funds occured there should have been some kind of Large print warning sent out and maybe the MSM should have harped on it every night like they like to cause I didn't get the message.

[truedelphi]

78. And why is it that in Oregon, an insufficient check fund cost

Was only $ 3 - in 1994.

But banks in California charge some $ 22 up in 2009. Did banks become less able to do things in 2009?

The banking industry has become MORE ELECTRONIC. So theoretically, shouldn't it cost them less?

[change_notfinetuning]

60. Action on this is long past due, but don't expect much from Congress,

including the Democrats. If it's anything like that joke of a consumer credit card bill, which should have set a usury interest rate, it'll probably set a limit of $29.00 on overdrafts, and call it a day. Or some such drivel. Anyone who is happy with the credit card bill probably sees nothing wrong with the overdraft situation as it exists now. We need to limit lobbyists and then the limits on corporate stealing-without-a-gun might occur. But, only then.

[LeftHander]

61. "Transaction Holding" - scam on the consumer.

I have long suspected banks from using "smart software" to hold back processing of transactions with the intent of generating a overdraft and subsequent fee.

Every time I have seen the proof in my own bank account and asked to see the logic and transaction flow, I was denied.

Having worked for financial institutions in a IT capacity I know 100% that NOTHING is left up to chance with transactions. They don't just float around in the ether.

When certain conditions are met, transaction processing software withholds some transactions on low balance accounts.

Case in point a small debit transaction fails to show up until another transaction is pushed through that drives the account into the red. The hidden transactions are processed first to ensure that a fee is generated. So effectively, accurate balance information is kept from the customer, tricking them into make a overdraft producing transaction.

With online and mobile banking becoming ubiquitous people are relying accurate fingertip information from banks on the status of their account. It is to the banks benefit to always keep accurate bank account balances known internally. You can't trust online account balances, in other words.

[Raster]

107. Thank you very much! Banks can and do structure how items debit from an account to generate as many

charges as possible. It is called "stacking" and BofA and Wells have been called on the carpet for their unscrupulous practices.

[mvd]

63. Good - they should not let you go over the limit

Next, action is needed on those APRs that make paying off even $400 seem like forever.

[Torn_Scorned_Ignored]

68. WTF took them so long?

Overdraft charges 20 years ago were outrageous. $30.00 for a bounced check.

[Romulox]

71. The banks still get to keep their trillions in taxpayer dollars though, right?

Wooo! You scared me there for a minute.

[Q3JR4]

79. Overdraft fees - how to beat the bank...

http://current.com/items/88849140_how-to-beat-the-bank.htm

Q3JR4.

[intheflow]

85. You should post this an a OP.

I made a scene in the lobby of my local US Bank and they gave me back my fees, but I like the idea of having a legal claim against them. As Nader says, if a million people took them to small claims court, they would change their policies. Thanks for posting! :hi:

[FBaggins]

87. It is a very clever idea.

But it's likely to only work as long as a small enough minority tries it.

It would be a pretty easy case for the bank to win (in most cases)... it just isn't worth their time/money. If it were happening all the time, however, it would cause a cottage industry of lawyers to spring up - willing to work on a lite fee schedule (or even contingent plus a percentage of the fees "rescued").

[Sivafae]

92. I had a serious problem with BofA. I would deposit my pay check, which is a

Cashier's check (just like a money order but with more cash). They would hold it for 4 days. So basically I would have a $1000 +I couldn't get a hold of for days. Because you know Wells Fargo won't pay on their own cashier's check. But before I found this out, I would get overdraft charges because I didn't know that my check was being held for FOUR days. Now, the thing is that the Banking system upped the amount of time it takes for a check to clear. It used to be 3 days, whereas now, it only takes 24 hours. So the practice of holding a check for 3 days is not only outmoded, it is not even a reflection of what is actually happening with the money.

[FBaggins]

94. That shouldn't happen except in the rarest of cases

Reg CC does not normally permit holds on Cashier's checks on amounts under $5,000. It requires next-day availability.

Are you sure it's a Cashier's check and not a official-looking business check? It's pretty unusual for most workers to actually get them as paychecks (there's little to no benefit to the employer and they take lots more effort and expense).

[truedelphi]

100. Paycheck cashing places would have charged you a flat 3% of the amount being cashed.

They make a phone call on the day you first set up a working ID situation with them - to make sure the cashier's check is legit and that you work for them. Then when they determine that you are indeed employed by the issuerer of the check, they hand over the money.

Doesn't take more than 20 minutes the first time around, and then after that, if the cashier's check is from the same employer, they usually don't even call.

Three percent of a check can be a lot less than the hundreds that can be generated by a bank keeping your check without depostiing it to your account, and then posting all your small debits against your account, with NSF fees negating a lot of what that check is worth.

And in small rural areas, family owned groceries might even cash such a check for free.

[dflprincess]

105. I won't get too excited until I see the bill that gets signed

This could just be the Democrats way of letting the banks know they're campaign "contributions" aren't quite where they should be. They might just be trying to shake the banks down.

"Your overdraft charges, nice little business ya got there. Be a pity should something happen to it."

Sorry, but the credit card bill and the Health Insurance Profit Protection Act are making me awfully cynical.

[depakid]

106. Hard to think of a better way for a Democrat to win re-election in 2010

than to go after abusive banks- and make it stick in a way that ordinary folks can see.

[Vidar]

108. Way overdue.