Chase and Bank of America Revise Overdraft Fee Policies

[rmp yellow]

Source: New York Times

September 23, 2009

Bank of America and JPMorgan Chase, two of the nation’s biggest banks, announced plans on Tuesday to drastically overhaul their debit card programs by lowering or eliminating fees, changing the way they credit transactions and allowing customers to opt out of overdraft protection.

The moves come as lawmakers and regulators in Washington push proposals to reform what critics say are excessive charges of which consumers are unaware. The penalties, known as overdraft fees, bring the banking industry tens of billions of dollars in revenue annually.

Bank of America said it would allow current customers to turn off the ability to spend when their account hits zero, starting Oct. 19. Next June, the bank plans to limit the number of times each year that current customers can overdraw their accounts when using a debit card at a store. It will let new customers choose whether they want overdraft protection when they are opening their account.

Chase plans to eliminate by the first quarter of next year a common industry practice that enraged many consumers. Instead of lumping a day’s worth of debit card and A.T.M. transactions together and then processing the highest amounts first — a practice that has caused large numbers of consumers to overdraw more quickly and pay more fees — it will credit the transactions chronologically. Chase also plans to allow customers to opt out of overdraft coverage.

Read more: http://www.nytimes.com/2009/09/23/your-money/credit-and-debit-cards/23credit.html?hp

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Good.

[imdjh]

1. Damn I'm getting old. I'm sitting here wondering what the sleazy catch is. nt

[mike_c]

3. you weren't born yesterday...

...and there is BOUND to be a catch!

[Skittles]

4. not a geriatric symtom, imdjh

we are so used to banks fucking the people it's what we all expect

[customerserviceguy]

5. They know they're pissing off customers

I'm almost done with my B of A credit card, just have about $500 to pay off, and they're kicked to the curb. My Chase card was at a zero balance, but I decided to buy that case of wine a couple of weeks ago from a local producer that didn't take my Amex. I intend to pay that off before Chase can make a dime of interest off of me.

[regnaD kciN]

8. Yep, I'm waiting for the other shoe to drop, too...

Fortunately, I moved my accounts to a credit union after Chase gobbled up the remains of WaMu (handed to them on a silver platter by Bush's Treasury Department).

[jobycom]

14. They are trying to avoid the Congressional regulations Obama threatened them with.

That's the reason. Their policies under Bush were completely unregulated, so they stole as much money as they could. Obama the other day announced they were going to look into banking abuses, especially overdraft fees. So Chase and BoA are trying a preemptive change to head of legislation, so they can still keep as many of their criminal methods as they can. And so they can go back to the old ways as soon as Obama gets distracted, rather than having to fight a federal law. A fight that would bring them bad publicity, too.

[DCKit]

22. They're terrified of regulation. That's the catch.

So terrified, in fact, that they're willing to forgo billions in profits every year to head off new laws and regulations.

[Gormy Cuss]

2. "allowing customers to opt out of overdraft protection..." Awfully big of them.

Jerks. All of these revisions are just resetting the rules to what used to be the way things were done before they became slap-happy with fee generation.

[mike_c]

6. I've never understood how it can be "overdraft protection..."

...if it indeed triggers both an overdraft, i.e. payment of funds that are not actually in the account, and overdraft fees to pay for the "service." That sounds more like "overdraft bait."

[Gormy Cuss]

10. I had overdraft protection for years, fee free.

That's what some banks used to call it when you could link a savings account. If there were insufficient funds in the checking account the money was automatically taken from the savings accounts, no fee applied. Now that was protection.

This newer version is doublespeak.

[anonymous171]

7. Good. Now they can't legally rob me anymore. nt

[regnaD kciN]

9. Oh, I'm sure they'll find a new way, somehow...

I'd watch for increased monthly fees and/or a charge to speak to an actual human being, instead of doing all your banking via phone, web, and ATM.

[jtrockville]

11. I dumped BOA earlier this year. Even with this news, I'm STILL glad.

A local bank (Presidential) suits me fine.
http://presidential.com

Can't say I miss 'ya BOA.
:p

[jobycom]

13. I dumped Chase, too, for exactly the reasons listed in the story.

They hit me with three overdraft fees in one day when they cleared a large check that put me over my limit and then cleared two smaller checks behind it. $35 a piece, that's $105 instead of $35.

The worst part is the only reason any of the three bounced was because they put a one day automatic hold on my paycheck. I was with WaMu, so I wound up with Chase when they bought my bank. The first time I heard about their automatic hold policy was when I was complaining about them costing me $105. I told them "You are going to lose a lot of customers over this," and the "customer service" (in this case "service" seems to have had the same meaning as "screw") person read a scripted answer that said "We are aware that many former Washington Mutual customers will be unhappy with this policy."

In other words, "fuck you, what are you going to do about it?"

I switched banks, but they got more money from me than I've ever lost at gunpoint for about a week's worth of banking.

[Mithreal]

15. We switched over to a credit union. Hoping more will do the same. nt

[jobycom]

16. I switched back to a credit union, but the CU was worse when I first went to WaMu.

The credit union I used was worse than Washington Mutual four years ago when I changed. They charged for teller transactions, for banking, and they charged $39 for overdrafts--something I avoid but it happens. And they had the slowest and rudest tellers I'd ever seen. Wamu charged for none of that, and their OD fees were $25.

Since I never closed my CU account, I checked them out first when I wanted to drop Chase, and they had greatly changed their policies. So NOW they are better. But not all are, not by a long shot.

[Mithreal]

21. Now's the time to shop around. My CU is giving 3.5% interest on checking

accounts to 10k and another credit union in town has no limit and gives, unless I misremember 2.25% interest on checking accounts with no limit. The fees are in some cases zero and in others much less than WaMu, now Chase. All the new Chase signs in town are quite an assault and I have a lot of negative emotions toward Chase.

Enough of us take our business elsewhere, we have a chance to curb their zeal.

Anyone else reading this, bank responsibly please and thanks.

[msongs]

12. just outlaw overdrafts - ppl oughta learn how to add and subtract lol nt

[wroberts189]

18. It is true yes ...but I have to say can be difficult with a significant other...

and the fast pace of bills.. online payments etc.


I do not think the high penalties are fair... charge me 5 bucks not 40.

[RantinRavin]

17. And how long until we hear people complaining

they couldn't buy medicine or food because the bank declined their purchase ?

[momrois]

19. Bank of America also has another new policy

At least it's new to me. My son overdrew his student account when they automatically withdrew a BofA credit card payment, unbeknownst to either of us, on the second of the month. He couldn't get his tipout at work until the 9th. They not only charged him the overdraft fee of $35, they charged him an additional $35 because his account was overdrawn for five days.

Thieving Bastards!

[booksenkatz]

20. Please remain in position while they change orifices. Your cooperation is appreciated.

They're gonna get their money... they may change methods, but don't be fooled. The screwing will continue as usual!

[SOS]

23. Hopefully, other banks will follow suit

I can't wait to walk in to my bank and tell that troglodyte manager: "Get that scam off my account NOW!"