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The New York Times via Redux
Rep. Carolyn Maloney, D-N.Y. and Rep. Maxine Waters D-Calif., have introduced a bill to limit overdraft fees, which provide banks with billions in revenue every year.
Congress will get another chance to limit checking account overdraft fees that continue to annoy customers and produce billions of dollars in revenue each year for banks and credit unions.
Reps. Carolyn Maloney, D-N.Y., and Maxine Waters, D-Calif., have introduced a bill that would limit the cost of overdraft fees and prohibit practices that increase the likelihood customers will overdraw their accounts.
“It protects banking customers from overdraft practices that the courts have found to be unfair, misleading, deceptive or fraudulent,” Maloney said. “And at a time when some many are still struggling, it will help to put an end to those unexpected $35 charges for a cup of coffee.”
Consumer groups believe the Overdraft Protection Act of 2013 would solve a lot of problems.
“It’s very clear that banks are gouging customers with incredibly high and outrageous overdraft fees that are not related to their cost,” said Ed Mierzwinski, consumer program director at U.S. PIRG. “The idea of a $35 fee for the privilege of overdrawing your account is good for the banks, but not for the consumer.”
According to a new report from Moebs Services, an economic research firm, financial institutions in the U.S. earned $32 billion in overdraft revenue last year, an increase of $400 million (or 1.3 percent) from 2011.
“Overdrafts have evolved from an ad hoc courtesy into a routinely administered, very high-cost, very short-term credit product,” said Rebecca Borne, senior policy counsel with the Center for Responsible Lending.
The nation’s bankers oppose the bill. They don’t believe it’s needed and they warn that more government regulation would only limit consumer choice.
“History has shown that when the government intervenes in how private markets price their services, there are unintended consequences that usually are adverse to consumers,” said Nessa Feddis, senior counsel at the American Bankers Association.
Key provisions of the bill
The Overdraft Protection Act would limit overdraft coverage fees in various ways. It would:
- Prohibit financial institutions from charging more than one overdraft fee per month or more than six each year.
- Require overdraft fees to be “reasonable and proportional” to the amount of the overdraft.
- Prohibit a fee if the overdraft results solely from a hold placed on an account that exceeds the amount of the transaction. Many merchants, such as hotels and gas stations, automatically place a hold on the money in your checking account when you pay with a debit card. At some gas stations that hold is $100 no matter how much you pump – something they don’t have to warn you about.
The bill would also ban the practice of posting checking account transactions in a way that maximizes overdraft fees. Some financial institutions routinely clear debits from highest to lowest dollar amount.
“That’s a big problem,” said Linda Sherry, director of national priorities at Consumer Action. “If you had one large check and several smaller debit card charges hit on the same day, they’ll clear the big check first. That drains a lot of money out of your account and could cause more of the little things to bounce. And the key here is you can be charged for each overdraft item, debits, checks or ATM withdrawals.”
Banks say customers want the biggest transactions paid first because they tend to be the most important, like the rent or mortgage payment. But a survey by the Pew Charitable Trusts shows just the opposite.
“Almost 90 percent of the people in our survey said they were somewhat or very concerned about bank reordering practices,” said Susan Weinstock, director of Pew’s Safe Checking in the Electronic Age Project.
Credit unions are also concerned about any new regulatory burden.
"This legislation seems to address a problem that doesn't exist in the credit union system," said Ryan Donovan, senior vice president of legislative affairs at the Credit Union National Association. "Because we are owned by our members, we are not out to abuse them."
Donovan believes the issue of overdraft charges is better handled by the Consumer Financial Protection Bureau rather than Congress.
Getting rid of customer confusion
If you try to make a point-of-sale payment with your debit card or withdraw money from an ATM when you don’t have enough money in your checking account, the transaction will be declined – unless you’ve signed up for overdraft coverage.
In that case, the bank or credit union will process the transaction and charge you an overdraft fee.
Consumer advocates believe many people don’t understand how this opt-in system works. A Pew study, which the banks challenge, found that 54 percent of the customers who had overdrawn their accounts said they did not realize they had signed up for an overdraft service that cost money.
“This just shows there is a very high level of confusion about how this works and why better consumer protections are needed,” Weinstock told me.
The banking industry insists customers are not confused. Feddis at the American Bankers Association said all the terms are spelled out before anyone signs up for the service.
“Customers receive a one-page consumer-friendly form that explains the price of the overdraft coverage, that there are better and cheaper options and the requirement to affirmatively opt in,” Feddis said. “And in the event they didn’t understand it, they will when the first overdraft charge occurs and they can opt out at any time.”
It doesn’t have to be this way. Since August of 2010, Bank of America has eliminated overdraft coverage on point-of-sale debit card payments. If there’s not enough money in the account, the transaction will be declined.
“We elected to eliminate that source of frustration for our customer and we think it was the right thing to do,” said Andrew Plepler, Bank of America’s global corporate social responsibility executive. “The feedback has been very positive. There are a lot fewer complaints about overdrafts.”
Plepler said they had expected customers to be upset when their transactions were denied. But that hasn’t happened. He believes the benefit of avoiding a surprise overcharge fee outweighs any short-term inconvenience of being unable to make a purchase or withdrawal.
“There’s certainly been a revenue hit for the bank,” he told me, “but we’re in the right place for the long term.”
The bottom line
This is Rep. Maloney’s second attempt to rein in overdraft charges. She could not get a similar bill passed last session and it’s clear this Congress is not in the mood to upset business. Yet, she remains confident.
“It’s common sense, it’s reasonable and it’s fair,” she said. “It’s time to put an end to these deceptive practices.”
More information
Pew Factsheet: The Need to Address Excessive Bank Overdraft Fees
Pew Factsheet: The Need for Transparent and Fair Bank Deposit and Withdrawal Processing
Center for Responsible Lending: Overdraft "Protection" A Racket; Not a Service
American Bankers Association: Overdraft Protection Services
Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.
Leave a Comment:
Unfair fees is one of the the only way banks can fuel its salary roll when so many employees in the industry are lazy, sedentary corporate campus office workers.
If you think the fees are unfair, don't do business with the bank.
Jimboza there are very few banks that don't charge $35 for an overdraft and some people have no choice but to use a checking account. Every Social Security and disability check is direct deposited now. Someone I'm close to is on disability and her benefit is about $650 a month. A few months ago she called her bank one too many times one day and ended up racking up a charge for that call that over-drew her checking account. She didn't even realize it was over-drawn until a few days later and by that time the bank had charged her over $90 in overdraft fees. I had to pay those fees because she couldn't afford them. A few weeks ago she called and her account had managed to overdraw her account by $2.50. The latest charge was shown as being made that day so I transferred money into her account to make sure it was covered with a little to spare. A few hours later an overdraft fee of $35 showed up on her account despite my having made a deposit to cover the shortage. The banks don't just charge for the overdraft but will continue charging every couple of days unless the balance is put back in the black. It's nothing but a rip-off.
Wow, Maxine Waters back in the news ?
What ever happened to her Congressional Ethics Committee investigation ?
Oh yeah, Congressional members look out for their buddies:
Sorta knew there would be a FALL GUY who will be given a letter and remain on the job or get a pay raise after moving to a different office.
Typical Progressive.
ido, let's try to stay on topic. I know it's hard for an ill informed partisan hack, but at least try.
Is there any responsibility for the account holder to keep his own balance? or is this just another indicator of an ignorant populace who has forgotten how to add and subtract? How is it the bank's responsibility to make sure you don't spend more money than you have?
They should make sure you understand the penalties if you overdraw your account, but if you don't like them go to another bank or pay closer attention to your check ledger.
It can be hard to keep track of your balance when you are making many small purchases with a debit card. It's not like it's an onerous thing for the bank to decline a purchase for lack of funds...they use computers for the transactions for heaven's sake.
Larry, I totally agree with you, so much for personal responsibility...I admit that I have made a mistake every once in a while on my balance, but I have always had any fees dismissed when I've called customer service...I ask politely, I remind them that I carry accts at their bank including my mortgage...I admit to my mistake and I realize they do not have to do forgive the penalty.
We don't need the feds or any other portion of the gov't intervening on our behalf on this issue....there's already too much intervention going on already by governmental agencies.
The reason we make consumer laws is to protect the consumer from being gouged. This is why we have anti-monopoly laws. It's not about shielding people from responsibility, it's about making sure they're treated fairly.
The only reason for the banks to push against reform on this is pure greed. Most of those overages come from the most poor... the ones who live paycheck to paycheck. And all so the big execs can get their bonuses.
Hey Larry and Juanita- what banks do you work for?
I bought a new windshield for my truck- cost $225. Had $243 in there due to a miscalculation. Then went out and bought 4 other things that cost less than $10 each. The bank put a hold on the $225 , then bounced the other 4 items for total of $140 in bounce charges. If they had paid the $225, I would have bounced just one of the other 4 items. And, they were telling me that my balance was still $243.
This is "fair" in what way?
Moot point- this legislation makes WAY too much sense to ever get passed (although hope springs eternal, upon hearing the new TSA stance on small knives- somebody in government grew a brain stem....)
If you know simple arithmetic it is not hard to keep a running total of your purchases.
Most transactions these days are debit based ... encouraged by the very institutions that are charging these fees. No longer is the stub based check book management the norm (not encouraged by banks ... too expensive). Banks also selectively choose which item per day get which rank in charging these fees ... you can have several minor purchases for sodas, food, etc., all under a couple of dollars, but the institutions will pay an electric, or other large bill first, enabling them not to charge one fee for the major payment, but fees for all charges that day. A $35 dollar overdraft fee for an 85 cent bag of chips raises more than a moral question. In addition, merchants discourage checks, and most larger business' require direct deposit of salaries. Do not be fooled into thinking this issue is with the user, this issue is carefully crafted by silk suit corporate executives to maximize their bottom line (and bonus').
I think the question here is who is responsible for managing YOUR money? It's you, not the bank! You are responsible for tracking every dime. If you don't have enough in your account, then you don't write the check and you don't try to use the debit card. It's really quite simple.
This was a few years ago (and by a few, I mean more than a few...), so the rules might have changed by now.
I worked as a waitress and the morning following my shift I took my cash tips and deposited them at the bank. Then I went over to the grocery store and picked up a cartoon of eggs and some OJ on my debit card. They immediately deducted the debit purchase from my bank account, but didn't increase my account for the physical cash that I deposited. Cash! Not a check, not a wire, or a transfer, cash!
When I called and complained about the overdraft fee they said deposits don't increase the account till the following day (BS btw, it says deposits before 2pm are available that day). Well then why did the debit card transaction decrease it immediately? I stopped depositing my tips after that.
It is called personal responsibility. Curious to know, though. Back before debit cards & credit cards were in such wide/daily use, how did consumer's handle their day-to-day purchasing & finances?
They used checks or user cash. Two practices that more often than not required physically going into a bank and seeing how much monet s/he actually had v. this "vapor" money that just seems to show up when they swipe a card.
I still write checks out by hand and sign them myself. Why? Well... I then get home put the information in my ledger and I KNOW EXACTLY where I am and what I can/not spend until the next payday. I am personally responsible!!
Time to bring BASIC financial education back into the grade schools (piggy banks & tooth fairies), junior highs (mowing lawns & baby sitting) and high schools (jobs); so the children can truly learn where money comes from and how spending now may not always be in their own best interest.
“It’s very clear that banks are gouging customers with incredibly high and outrageous overdraft fees that are not related to their cost,” said Ed Mierzwinski.
The nation’s bankers oppose the bill. They don’t believe it’s needed and they warn that more government regulation would only limit consumer choice.
“History has shown that when the government intervenes in how private markets price their services, there are unintended consequences that usually are adverse to consumers,” said Nessa Feddis, senior counsel at the American Bankers Association.
I think these two quotes sum up the problem very well - that the banks are screwing us all so they can be rich. Kind of like putting the wolf in charge of the hen-house. Frankly, I think they are criminals. The financial meltdown of 2008 was caused by fraudulent bank practices. Now I think they need to serve time over it.
You are partly right...but much of the melt-down was also due to governmental mandates regarding providing loans to persons that couldn't qualify nor have the ability to make the payments...Dodd-Frank.
The only reason these people qualified for these loans they couldn't pay back is because the banks falsified the loan terms and made changes to make it look like they could pay it back. It wasn't from governmental mandates. It was from deregulating the financial industry and basically letting them do whatever they wanted. And I agree with jp - they really do need to serve time behind bars for causing this meltdown.
Juanita, I've been hearing this crap for years now, how it wasn't the banks fault that all those risky mortgages were out there, it was those mean, crooked congressmen that MADE them make those loans. HORSE SH*T! Dodd Frank did NOT "require" those banks to make the loans, it loosened the regulations so that they could. The banks jumped on it, because they knew they could make hundreds of billions of dollars packaging those mortgages and selling them off as "insured investments" when they knew they were anything but. The housing and economic collapse is on the banks, investment firms, and AIG...and no one else, period.
Dodd-Frank has absolutely NOTHING to do with the 2008 financial collapse. Dodd-Frank is the bill that is regulating many of the banking practices that lead to the collapse. It was passed in 2010, well after the financial collapse.
If you're talking about banks being encouraged to lend to red-lined neighborhoods, you're talking about the Community Reinvestment Act along with Fanny Mae and Freddy Mac that encouraged these loans. HOWEVER, those two pieces of legislation did not mandate fraud by the lenders.
You're right frankj. Dodd-Frank is a consumer protection law passed under President Obama's watch, before the Teabaggers grabbed power through the power of Gerrymandering. Not that the Democrats wouldn't do the same.) The Community Reinvesting Act was passed while George Bush was still President, albeit under a Democratic congress. However, Bush didn't have to sign the bill and the Dems didn't have the votes to override a veto.
juanitodominguez, you need to brush up on your history. And then you need to go back and troll Fools News.
The banks aren't screwing you. You're screwing yourself. You're free not to deal with the banks if you don't want to.
You're the one who is putting the wolf in charge of your hen house if you do business with banks that you don't like.
Don't blame others for your own problems.
Charged extra for not having enough money. Only a banker could dream that one up!
darrall: you do realize that banks are in business to make money?...if you don't like it...pull all your money out and keep it under your mattress.
Ms. Dominguez,
Face it, you are attempting to use logic with those who have long forgotten the concept of personal accountability. Our society is now one of "woe is me," "why can't I have something for nothing," and "but he/she got something for nothing, why not me."
This country has gone from a society that knew no bounds in their desire to work, succeed, and prosper to one of gimmee, gimmee some more, gimmee it all! There was a time when we, as a society, believed in being a part of the solution by being productive, and not blaming all of their failures on others.
Juanita and Playpen, it must be wonderful to have such perfect lives that you can lecture the rest of us on "Personal responsibility". I don't think any responable person is against banks charging overdraft fees. What they are against is that in today's world, where debit cards are used instead of cash, it's easy to go 20 bucks over with four small purchases. And what the banks are doing is charging you $35.00 for each of those overdrafts. So...you "borrowed" twenty bucks from the bank for as little as a day, and they charge you $140.00 for the privilage. Tony Soprano could only DREAM of collecting those kind of interest rates, but then he was...oh, yeah...a criminal.
Juanita, you're more of a fool the more comments you make. As I said before, go troll any other place at Fools News first, they'll welcome you with open arms.
No. Try again.
But think this time before posting.
What happened to bank not allow charges to go through when you do not have enough funds to cover? Oh wait they stopped doing that because they could charge crazy amounts for OD's. (PROFIT) I remember my first back account, when I wrote a check and it did not have enough funds the check did not clear. I remember when I got my first debit card if there was not enough funds in the account the charge would not go through either. What happened to that? I agree there should be personal responsibility, but when there is not enough money in the account the charge should not go through period.
Another point charges should go through in the order in which the bank receives them. Not some person saying ok I will put this charge through first because they think it is more important than the others.
In the day of computer transactions most things should be instant. If you charge something with a debit/credit card that amount should be removed or held and that amount should not be accessible anymore. So that you cannot charge over what you have in there. The only thing I can see being an issue is checks.
I'm no "fool"...you know the old saying though " a fool and his money are soon parted"...seems to apply to many of you posting here.
Actually, is anyone/everyone here aware of the REG D rule? One that if your account activity on a savings account appears to be more of a "bill paying" process v. a saving process the account holder can get charged $9.00 for every transaction beyond the "free" 6 per month?
This includes automatic overdraft protections from a savings to a checking account. WHAT?!? Yes! I tied my checking to my savings in the event I O/D my checking (it happens). Well, the bank "covered" checks with my money from my savings because my balance was all jacked up. Seeing I was in "trouble", I transferred money from my savings to my checking to make sure I had a positive balance. That one transaction + the banks "covering" of my O/D's caused me to be charged $9.00 courtesty of REG D.
REPEAL REG D!! How I use my money should be up to me. Especially if I am going to get taxed for saving it, taxed for growing it and taxed for using it.
This is absurd! Its not the banks responsibility to make sure you have enough in your account! If you write a check and don't have enough to cover it, THATS YOUR FAULT. I have worked at banks and its amazing how irresponsible some people can be. They get paid on friday, withdraw all but $5 dollars and then 3-4 days later their accounts are overdrawn because checks came through. Why would you blame the banks when its grown adults who can't manage their money? Also, banking is heavily regulated as it is (and rightfully so). Customers are given a disclosure booklet and shown a few schedule at the time of account opening which is required by law. Furthermore, pretty much every bank offers online banking, phone banking (automated & live), and many even have mobile apps or you could just go to (or call) your local branch to get your balance. With all this information at your finger tips please explain to me how it is the banks fault if YOU overdraw your account???
The problem I see here is the amount of money the banks are charging for overdraft fees. And how they are charging people for it. If someone doesn't have enough money to cover one check, what makes you think they can cover a $35 fee? and that $35 fee causes more checks to bounce. One overdraft could easily cost people 100's of dollars in overdraft fees. You don't think that's a little harsh?
And please give people some credit. People come under hard times here and there and over drafting their account doesn't equate to people not being fiscally responsible. There are some people out there like that but to pigeon hole people is just plain ignorant.
onesoul4u2,
You are right, people do run into rough times. However, writing a check that they know will not clear is called "theft."
Also, just MHO, but I do NOT believe that the average person (read: overdrafter) does not really know when they have no money in their account. However, if I am incorrect, then may I suggest that they should work on a cash basis, e.g., buy money orders, pay utility bills at the grocery store, etc.
Before you get on your high-horse, let me defend myself by saying, "Yes, I am a dinosaur (mid-70s, reared by parents of the Depression, taught to work, and expect nothing more than what I could afford to buy and pay for.
Dave! - explain this: Peoples Heritage Bank LOST $1500 of mine back in 2000. They then charged me 29 bounced check charges because of the loss- I had everything right to the penny in my register , which I and the CSR went over 3 times.
She told me I was exactly correct, but because they couldn't figure out where they money went, they weren't going to return it.
The research dept. also agreed, but couldn't find the mistake; they offered to look further, but would charge me $25 an hour to do so.
SO, I let it run idle for 6 months straight - NO transactions. We all agreed it was ata zero. Got a debit card - "you cannot overdraw this!"
Deposited $40 ...made sure it posted. Took $20 out at an ATM, and was $20 OVERdrawn the next day. "Not possible" was the explanation. I DID get that back.
So: explain.
Banks are there to screw the customer to the wall. As soon as they get all your money, they will drop you -
Sorry for what happened to you Ritdog...but not all banks are created equal. It sounds like you just had a bad bank. I hope you have since switched banks.
In the last 10 years, I have experienced a bank mistake on my account twice (two different banks). Both times, the banks were very good about it...they looked into it, then they fixed the mistake and didn't charge me any kind of fees.
Don't get me wrong though...I can see both sides of this discussion...there really are some bad bank practices (like holds that you are not told about) but on the other hand there are also A LOT of irresponsible people who just do not keep track of their money.
Good God, I find it so appalling that those who choose to NOT OPT OUT of overdraft privileges think they should just use a checking account like a credit card account and avoide keeping control of their balances. As usual, our Nation just keeps sending the loud and clear message that every bad habit in society should be glorified and encouraged.
Feds don't have any right to impose a "once a month" overdraft limit. People that bounce checks regularly (and many do), aren't suppose to be put up on some pedestal as role models for responsble banking. Either opt out of the overdraft program or stop using your checking account like a credit card, which it is NOT. Banks don't have to give you "credit" or phantom cash to use for free just for being so dumb and not knowing how much cash you have on deposit. If we keep dumbing down our country and continuously glorifying bad habits and character flaws, we surely are headed for lots more dysfunction down the road.
The banks conceal the overdraft protection with language. On the bank website, it might have in big bold letters when you log in - "You may not be protected from account overages!"
I've also seen letters where they attempt to scare the customer into signing up for overdraft, painting a picture where the customer gets a flat tire, in the middle of the night, in a rainstorm, and needs to call a tow truck, but OH NO, their debit card is declined!
RandomB:
Scare a customer? If you feel scared, you should leave the bank right there and then. This sounds again like a lack ability to maintain a healthy business relationship with a bank.
Jimboza;
No, I used to work at a bank. This was a form letter they were preparing to send to all the customers when a new law was passed mandating overdraft to be an opt-in program with the banks instead of opt-out. They were terrified of the lost revenue and wanted to make sure people stayed in the program.
I would rather have the overdraft protection in case I accidentally have to pay extra for a blown tire or mechanic service than have it declined and have their fees plus the declined fee from the financial institution. All this bill will do is have more items returned and they still will have fees. I don't believe that people don't understand the overdraft protection when they sign up for it. They all spell it out from the last round of legislation that hit regarding disclosure! This is one area the government should stay out of, it's not like credit cards!
OU, if the OU means Oklahoma, I can fully understand why you don't have the knowledge to understand the bill. That institution of mediocre learning and higher football, if you believe their crap about their football team, doesn't exactly have a good record when it comes to economics and mathematics. Read the bill, it's a pretty good one that protects consumers that haven't a clue what they're signing up for. Those are the consumers that went to OU (any OU).
First, Most banks only offer "overdraft protection" to those who "qualify" which by bank definition.. are people that do not need it. I remember about 20 years ago, if you tried to write a check or withdraw money that wasn't in your account, the transaction was denied. I believe people should own up to there own responsibility but to charge people 35$ for a typical over draft that runs in the few dollar range is extortion. The banks are sitting on over 6 trillion in cash that they refuse to loan out while most of America lives paycheck to paycheck. Charging people an absorbent amount of money because they did not have "sufficient funds" is the equivalent of hitting your own child for being bullied at school. It is just ridiculous. When people are strapped.. just deny the purchase. The majority of people that get hit with this cost don't even realize they are close to going over.
Erik Grimnes,
There is something that I obviously do not comprehend about your statement above. If those people are living paycheck to paycheck, then by what logic do you think they should be granted a loan.
Put another way, would you loan one of these people money knowing that they already are barely making it with their current expense load? Being poor (which I have been) and/or over indebted does not qualify one to be granted a loan on that basis.
Actually that is false.
I always had overdraft protection on my bank account. Even 20 years ago.
If you don't like the fee amount, don't do business with the bank or negotiate with them.
plapen, I am a small business owner who has no problem paying my bills or managing my checkbook. Since business and banking today is mostly electronic and the typical method of payment is with a debit card, banks have made it there mission to nickel and dime every charge possible. There are fews on top of fees on top of more fees. Right now a credit score in the high 700's to mod 800's does not guarantee you a loan. My point is that if you are going to let the punishment fit the crime, then charge much less for an honest over draft unless you are a perpetual flake.
Banks need to do a better job explaining the options to prevent overdraft fees to the crowd that has absolutely no clue what a check ledger is.
Mr. Flinstone123,
Not sure about the philosophy in Bedrock, but maybe those "who have absolutely no clue what a check ledger is," should not have a checking account. There is no greater system for controlling your rate of money expenditures than a "cash" system. Ergo, you look in your pocket, if there is money, spend. If there is no money, do not spend.
Mr. Flintstone, you DO realize, do you not, that carrying around all the cash you're going to need for the day is a good way to get yourself killed in many parts of this country, right? I NEVER carry more then twenty bucks, and pay for everything over that with a debit card. Luckily I'm able to keep a balance in my checking account, but then I am also lucky enough not to be one of the tens of millions struggling to make it on minimum wage or less, who are those most likely to live, work, and shop in those neighborhoods where crime is rampant.
Screw the banks. They've had it all their way for far too long.
When banks were first using debit cards in the 90's and making the transition from paper checks you were simply declined when you made a purchase. Banks soon made all the changes discussed in this article for one reason "GREED!". You say go to another bank, but the problem is they all started doing it, there was no other option. If you write paper checks then you should keep track of your balance, but is it really that much to ask that you not break a system that in the beginning monitored and rejected electronic transactions that over drew an account. Some things in life become necessity and we have reached that point with banks and gasoline. Interestingly enough two of the worst industries for using every deceptive practice imaginable to fleece customers.
You're free not to use a bank at all.
The bank doesn't owe you anything. They're a business that you can choose to deal with.
Jimboza, at one time I would have agreed with you about taking personal responsibility for your finances so you were not racking up overdraft fees in the first place. This of course would be before I became disabled. I have not filed for disability because I make enough most of the time to make ends meet making jewelry. I have to have a checking account for my son's child support because it has to go through a third party that monitors it (otherwise my son would never receive a dime). I never have much more than $50 to $100 in my account each week. I have racked up over draft fees because of how my bank chooses to list the charges. On Monday I have $50 in my account and I gas for $15, I give my sons school $10 for a field trip, pick up meds for $15. On Tuesday I deposit $100 then I buy beads for $80 to make my next order on time. The bank will post the $80 before the $100 deposit and waits to post the gas and meds a day or two so I now have 3 charges of $37 each. Last month i was charged 5 separate charges again for $37 dollars a pop because I didn't realize that when I got gas for $8 my bank placed a $50 hold until they receive a total amount from the gas station - what??? Of course this would be the time that I didn't enter my zip code correctly and I had to run my card a second time so another $50 was on hold. This had never happened to me before or since, nor do I remember being told this by my bank. I just had 5 very small charges which would not have thrown me into the red but I didn't know about the money on hold. The bank said they couldn't write off any of the charges but I need to call them in time to release the money before making charges. I don't feel that I am stupid or lazy and I do read what I sign at the bank. Before I was injured I worked 2 jobs and went to school full time until I received my extended Master's Degree in Special Education. I worked for a school district for 18 years. When you have this amount of money timing is everything. When and how the bank posts my deposits and withdrawals can mean whether I have enough to buy my medication or pay my bills. I usually kept some money in savings to transfer quickly but they started deducting $5 each month so I stopped using my savings and also had to pull out a savings that my 11 year old had been using to put his allowance in.
I am not charging $200 buying clothes when I only have $10 in the bank. It's obvious you have never had to do this. You should try to keep only $50 for a week and see the other side of the fence, I bet it looks very different. I am really asking you to try it for a week.
It was my fault for not taking the time to understand the opt out info but this option was never brought up at any time when I was speaking to the bank about the charges. I feel swindled by the man!
Another way they like to rip off customers is to delay posting transactions to accounts. The ATM states one balance, the actual balance is different. This doesn't hurt anyone much, except if they are poor, and need to know what the actual balance is. Only in the US are banks allowed to do this, it is forbidden as a predatory practice targeting the most vulnerable consumers.
What bank does this?
Citibank, for example, specifically spells out how much is available now on the ATM receipt.
Don't do business with the bank you don't like.
Yeah... we need more government to deal with personal responsibility issue... typical liberal crap again.
Clueless spokesperson, Nessa Feddis, senior counsel at the American Bankers Association just doesn't get it. Banks were found directly responsible for robo signing documents, lying, destroying evidence, cheating customers, treating them like dirt. And she has the audacity to say government oversight of banks is bad for business. What world is she living in? Not this one. She needs to look in the mirror to see the problem, herself. Hasn't got a clue what banks willfully do to screw their customers. Exactly why more and more of us are dropping banks for credit unions. I did this 35 years ago and never looked back. Nothing lost at all.
I do believe that the Banks, including the credit unions are really user friendly. We, the consumer, should also do our part, as George Carlin one said "A <can remember the name of the candy bar> is not a major purchase" which means, considering the cost of an overdraft any purchase that is less than the overcharge fee should not be made. Does it really make sense to charge a three dollar birthday balloon, when you have the potential of incurring a thirty-five dollar overcharge?
where is the consumer protection buereau dems? Come on ? Lets hear it. Your funded? Why are they not jumping up and down like rabid dogs? Well...You gonna blame bush? Besides , this is a dog and pony show anyway. Everyone knows that these dum b ar s women on this panel are only out for media coverage anyway. Thats their game, now get out their and donate to these illiterates.
The Consumer Financial Protection Bureau (CFPB) is limited in what it can do by existing federal laws, which among other things currently allow the outrageous overdraft fees and other forms of surreptitious usury (a.k.a., "loan sharking" in all its sinister forms) . . .
Notice that the Congress is limiting its focus to what it calls "unfair" overdraft charges, which leaves wiggle room for the sleasy sneaky weasel bankers, really . . .
Really! :-o
P. S. However, the real problem is that the Congress is doing nothing to create jobs at a time when calling the economy "stagnant" is little more than an indication of vastly deluded and overly exuberant optimism . . .
What we need are massive Keynesian projects, since these types of projects are the only way--other than a global thermonuclear war--to get the economy moving forward with good paying jobs for everyone who wants a job and is ready, willing, and able to work, where the jobs also need to provide first-class healthcare, education, and retirement benefits, for sure . . .
For sure!
And for the folks who ask what might be the most ignorant question of all time with respect to Economics--specifically, "Who is going to pay for it?"--I refer you to the way things were in the mid-1950s with highways and the way things are now with a fully developed national interstate highway system . . .
The fact of the matter is that in the mid-1950s there was not enough money on this planet to build the national interstate highway system, let alone all the state highways and supporting infrastructure . . .
The way it worked is that the Congress with approval by the President provided for initial funding for the massive Keynesian project to design and to build a national interstate highway system, which got everything started, and then the project essentially paid for itself though gasoline and diesel fuel taxes, sales taxes, motels, hotels, restaurants, theme parks, drive-in movie theaters, malls, stores, and so forth and so on, all of which appeared automagically as the national interstate highway system was built, and the federal government was repaid for its initial funding and high-level guidance . . .
The primary reason that only the federal government can do massive Keynesian projects is the simple fact that only the federal government can create money out of thin air, which is done currently by various activities of the Department of the Treasury, Federal Reserve System, and the New York Federal Reserve Bank . . .
And this is the way the intercontinental railroad was done, as has been the case for a lot of massive Keynesian projects . . .
[NOTE: A key aspect of the interstate highway system was national defense, which President Eisenhower realized after studying the interstate highway system that Germany had before and during the Second World War, which was designed specifically to make it possible to move troops and weapons quickly anywhere in Germany at a moment's notice, at least in theory . . . ]
[SOURCE: http://en.wikipedia.org/wiki/German_autobahns ]
http://en.wikipedia.org/wiki/Interstate_Highway_System
[NOTE: Initial funding for the transcontinental railroad was provided in significant part by bonds backed by the federal government, which is another way to do it . . . ]
http://en.wikipedia.org/wiki/First_Transcontinental_Railroad
Private industry does not have the financial resources required to do massive Keynesian projects on a vast scale . . .
And while the question "Who pays for it?" is remarkably ignorant, when people use it as the basis for making large scale economic decisions it becomes extraordinarily stupid, because it results in what we have today as the guiding rule, which is "Get Small", and what happens over time is that everything continues to get smaller and smaller until there is nothing remaining, really . . .
Really! :-o
Wow...the most nonsensical post of the day. Congratulations!
We have some stupid people here. Never trust a banker and never trust a citizenry who isn't well educated and well informed.
Banks are sneaky weasel slime, and they need to be regulated ruthlessly . . .
The banks had no problems standing in line to get federal government bail-out money, which comes from the people, but when the people are struggling the banks just use it as an opportunity to turn the screws a little tighter . . .
And if the banks do not like vastly increased regulation, they can go out of business, really . . .
Really!
I don't do business with banks anymore! We have had 3 banks build new buildings in town in 3 years,(overdraft Fees. These banks practice lower to higher and also when doing their transactions they also take withdrawals first before the deposits. This almost certainly leads to over draft charges.
So all you people that say "If you don't like the bank don't use it" You're right. For those idiots that say "Be responsible for your own account" We were. We even had direct deposit and still came up with overdraft charges because of those banks practices.
I bank with trustco in florida. I was paying for a product and realized I was use the wrong card. The merchant canceled the transaction and I use another card. Trustco ,even though the account never showed the transaction on the debit side, they still charged for a over draft. When I ask for help I was given the run around. On you need to call the branch manager, on you need a special form , on you need customer service. Still the thirty-five dollar charge is on the account. If it had be a overdraft, maybe ok. But, no over draft happened. fact. moving account.
Bank of America once tried to charge my mother a $35 overdraft for being "overdrawn" 32 cents. And she wasn't really overdrawn; they just hadn't posted a cash deposit received the same day.
USAA only charges $29, still alot but way better than most banks that charge between $35 and $39(!!!) for ODs. Also ING doesn't charge OD fees at ALL. What's great about them is that they give you a line of credit that you can use in case you overdraw. Just do your research and you will be able to find yourself a bank that works FOR you instead of AGAINST you.
I am very disappointed with those that feel this isn't an issue of customers spending more money then is in their account. Why isn't it? I have read numerous comments by those that say it's too easy to not keep up with multiple debit card transactions and lose sight of how much you are spending. Then get rid of your debit card!! If you can't write it down in a ledger like you would a check, then you shouldn't have the privilege of having a debit card. And it is a privilege!
The government's insistence on forcing banks to lower NSF fees to make the consumers feel better isn't addressing the real issue. If you want the government to make regulations to protect the consumer, then my suggestion is to get rid of overdraft practices all together. No one gets to overdraw their account. All banks will post all debit/credit items in exactly the order they come in (ATM withdrawls and POS will get paid first as they can't be returned), and if you don't have enough money, it gets returned! Period!! For those that feel this truly is an issue of banks greed and not an issue of consumers living beyond thier means at the bank's expense would agree. This protects both the bank and consumer.