The Finance Lobby
| Mon Sep. 21, 2009 8:27 AM PDT
If you use your debit card and overdraw your account, your bank will hit you with an overdraft fee. If you make five purchases of ten dollars each on the same day, you'll get five more overdraft fees. And just to make sure you get hit with as many fees as possible, 
your bank will make sure to debit your biggest transaction of the day first — even if it was actually the last one you made that day. That way your account goes to zero faster and every subsequent debit triggers another fee. Ka-ching!
That's all bad enough, but there's one more thing: you have no choice in the matter:
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.
Dodd dismissed concerns about the impact on ailing banks. "People out there are getting whacked," he said. "They should have the right to say, 'Deny me the transaction.' "
Well, good for Chris Dodd. I hope his legislation passes. But seriously, ask yourself this: what does it say about the power of the finance lobby in America that this was ever legal in the first place? I mean, it's not even a close call. It's just flatly outrageous. It's outrageous that banks should be allowed to charge fees that amount to 1000% interest rates on a short-term loan; it's outrageous that they should be allowed to reorder your debits to make you pay more of these fees than you should; it's outrageous that they should be allowed to charge multiple fees per day in the first place, since they're essentially just making a single loan; and it's outrageous that they should be able to do this whether you want them to or not.
Let's say that again: They can force you to accept a loan at 1000% interest whether you want it or not. And no one before now has been able to stop them.
Think about that the next you see one of those happy happy happy Visa debit card commercials where they're exhorting you to just swipe that card for every purchase you make without giving it a second thought. There's a reason for that. And there's a reason they can get away with it.
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Comments
I'm sure progressives get a
Submitted by MacGruber on Mon Sep. 21, 2009 8:41 AM PDT.
I'm sure progressives get a good laugh at their cocktail parties about teabaggers and their protests against the nanny state.
Here's a good example of why conservatives think this.
Really, does the government have nothing better to do at this time then protect stupid spenders from themselves? Does the federal government really have a dog in this fight?
To me, the only people who are getting screwed are those who can't balance their checkbooks. I know, balancing a checkbook is a lost art these days - what with ever-present credit cards and schools more interested in teaching more valuable things like multiculturalism and self-esteem - but really, is it the bank's fault that their customers don't track their own finances?
Why does the federal government have to force banks to track the finances of their customers?
If you feel outraged over such practices, then just balance your checkbook and don't spend what you don't have.
I don't know how to break
Submitted by g. powell on Mon Sep. 21, 2009 8:48 AM PDT.
I don't know how to break this to you, MacGruber, but having lenders take advantage of ignorant consumers hurts everyone -- such as misallocation of resources, trillions of dollars in bail-outs, a deep recession. I'm surprised you missed that stuff. You really should turn off Sponge Bob and watch the news more.
RE: Allegations of collusion; worthy of regulation?
Submitted by FreeIceCream (not verified) on Wed Sep. 23, 2009 11:03 AM PDT.
Every seller in a market having the same policy does not constitute collusion or anticompetitive behavior. Every bank also has the same policy of charging roughly near the market rate of interest on loans, calculated in standard ways. That's because they're all selling the same thing, and their prices converge from market forces (hopefully this phenomenon does not seem suspicious). "Overdrafting" is also something they are selling (whether you purchase it intentionally or not), so they charge a fee for it. That doesn't mean they are all colluding to do the same thing
If the bank misleads consumers about the existence or amount of overdraft fees, then certainly regulation is in order. Hopefully Obama's consumer protection agency for financial products will ensure this.
However, there is a cost to federal intervention, and in small matters, it's often not worth it. If consumers believed it was worth significant attention, they would show it by avoiding overdraft fees more conscientiously. The fact that they don't believe it's worth putting forth the effort to avoid them means that it is certainly not worth the costs of passing and implementing federal regulation about it.
overdraft fees
Submitted by Anonymous (not verified) on Sat Oct. 3, 2009 6:21 AM PDT.
There is NOTHING a bank or industry can do wrong, or, an American Citizen can do right according to a repug. But, how they squeal when it's out of THEIR pockets.
You write the dumbest things.
Submitted by jrw on Mon Sep. 21, 2009 8:58 AM PDT.
Like this: "Why does the federal government have to force banks to track the finances of their customers?"
Tracking the finances of their customers is what banks do, you ninny. That's how the bank knows what the customer's account balance is, so they can encourage them to exceed it and charge loan-shark interest rates for the privilege.
Is this what your version of conservatism, or whatever you call it, amounts to? Just a complete worship of the corporation? Your supposed hatred of the nanny state doesn't seem to apply to the 24-hour day care program the government provides for the finance industry and large corporations in general.
How about this for a rule? If you don't have enough money in your account to cover a purchase, your card will be declined. Does that satisfy your need for rugged individualism? Or is it a bad idea because there's no fee a bank can charge?
Oh, and yes, we do laugh at teabaggers.
Counterproductive dialogue
Submitted by FreeIceCream (not verified) on Wed Sep. 23, 2009 11:43 AM PDT.
Ad hominem attacks and name calling have no place in policy discussions.
teabaggers pay the most bank fees, and don't even know it
Submitted by tpx on Mon Sep. 21, 2009 10:11 AM PDT.
Making good loans is a lost art these days - without even bothering to determine if the loan recipients are able to pay or without even bothering to determine if the home is worth the value of the mortgage loan - banks make bad mortgage loans and then expect county tax payers to finance the evictions.
Why do county sheriffs' have to force people out of the homes banks made bad mortgage loans for?
Well, you're flatly wrong on
Submitted by James2 (not verified) on Mon Sep. 21, 2009 1:36 PM PDT.
Well, you're flatly wrong on your eviction comparison. Owners aren't allowed to evict defaulting tenants (or holdovers) themselves because politicians decided that we shouldn't have a policy of allowing private citizens to force other private citizens out of the places they're staying. We want to be damn sure evictions are proper, which is why they require court appearances and a Sheriff's presence. Similar policy goals are also behind the 90 day (now 180 day in CA) foreclosure process, the 1 year right of redemption (in many states), etc.
So, while it was a cute attempt to try to paint the banks as the users of government resources, the very laws you speak of were enacted (mostly by FDR) in order to protect the delinquents.
This kind of nonsense
Submitted by soarky (not verified) on Tue Sep. 22, 2009 12:45 PM PDT.
This kind of nonsense reminds me of "just say no." For many, there is no balancing of checkbooks. I haven't seen any fiscal conservatism from the neocons... not ever. Certainly not from Reagan or either Bush.The plank says regulate civil rights and freedom of speech, but leave the corporate giants alone. It's funny because the poor and ignorant protesters that attend the rallies regularly take it in the can but are too dumb to know it. As the bumper sticker says, "If you vote Republican and aren't a millionaire, you're just plain stupid."
Overdraft fees
Submitted by jaz (not verified) on Wed Sep. 23, 2009 10:28 AM PDT.
MacGruber either didn't read the article or doesn't under the issue. No one is suggesting that people should not be responsible for their overdrafts. The problem is that overdraft fees have become a profit center for banks and are completely inequitable. Like so many examples in our society, the fees fall disproportionally on those with no credit or with bad credit. People like me have overdraft protection. If I overdraw my account once, twice, three times or more on a given day, I pay a $5.00 transaction fee and then pay interest of about 13 percent per year on the transferred balance until it is paid. If I pay back the full amount on the next business day, I pay only the amount transferred plus the $5.00 transfer fee, but zero interest. Without overdraft protection, I would pay $35.00 per transaction no matter how small any given transaction might have been. This is simply unfair to consumers. Of course, I forgot. Conservatives oppose taxes of all kind, but support the right of corporations to gouge people in the so-called "free market."
MacGruber and the reality of the banking world
Submitted by Devon Noll, MPA (not verified) on Fri Sep. 25, 2009 9:28 AM PDT.
MacGruber, many people who do balance their checkbooks and do not overspend can be crippled by bank policies such as this. Do you expect everyone to be honest who has access to your debit card information? Pay attention!
Here is something else many people who criticize people for overspending may not know: Your bank will honor any debit sent through on your card number if you have ever ordered anything from the vendor in the past without verifying with you, notifying you of the pending charge, and even if you notice it and call them to not honor the charge!
In other words, the bank colludes with unethical vendors or scam artists to take your money from you against your wishes. And, if you file a complaint, they will continue to clock up these charges, insist you get your money back, and when you do they do not post it back to your account for nearly a week, continuing to clock up even more fees.
If you call and demand that the fees be reversed, they claim that they made a "temporary" deposit of the money into the account until their investigation is done, and only if you threaten legal action do they actually admit that the money was returned.
From there you have to get them to reverse the fees - good luck - and that adds more fees, because by now you are getting fees on top of fees only. Only when you demand that they reverse the fees and close the account, or you will take them to the governmental agency that regulates (?) them, do they agree, but only if you let them zero out the account - which means they get to keep any money that you would have had in the account before the mess started. I can tell you from experience - it is easier to let them keep the money (assuming it is a fairly small amount), then to keep fighting with them. In my case, I was letting the account remain at a low dollar volume prior to closing it, so it was only a few dollars, but I spent probably 20 times the amount in the bank account in long distance charges on my phone trying to resolve the matter, since I no longer lived in the area where the bank was located.
These banks need to be regulated, and heavily. With online transaction now accounting for a vast amount of debit transactions, the ability of scam artists, abetted by the banks and their policies, to bankrupt people is exponential. In my case, they wanted over $155 in overdraft fees for a transaction that was fraudulent and which had they followed my instructions, would have been avoidable.
So you see, MacGruber, it is not always about balancing your checkbook or irresponsible handling of your account. It is about scam artists, unethical businesses, and poor bank policy.
OVERSPENDING AND GETTING WHACKED HARD
Submitted by Anonymous (not verified) on Fri Sep. 25, 2009 10:30 AM PDT.
It is true that people who don't have enough money in their bank accounts and who use there card get overdraft fees. What wrong with the overdraft fees is in the above statement, they reorder you purchases to get the fees multiple times, what is wrong with charging one fee for the overage then over and over again? Well they are making their money on your stupidity that's for sure but think of this. While they are extorting those fees from you, they aren't giving you much interest on the money that you do have in there either. Banking is a service, but they really don't give you much back for putting you money in the bank. You might has well cut up the atm card,carry you cash on you, and when you run out just stop buying. Use them for the free direct deposit and bill pay, but otherwise take the money you need out and stay on the budget to stretch that money.
Yes, I think govenrment needs to crack down hard on banking practices, besides they were just like the poor stupid who are getting smacked with $37 overdraft fees except they begged for a bailout from the Bush Administration and Congress and they got it. Where was ours????!!!
balancing my checkbook
Submitted by Anonymous (not verified) on Fri Sep. 25, 2009 8:05 PM PDT.
This kind of thievery by banks is outrageous. It's not always a case of not balancing a checkbook. As an example, I once had a mostly inactive checking account and forgot I had my newspaper subscription take out tri-monthly payments automatically. The payment bounced without my knowing it, and by the time the bank got around to sending me my snail mail notice, they had charged my 3x $35.00. Expensive newspaper!
Yes, I did close out that bank,
Not too long ago, the courts
Submitted by cepetro on Thu Oct. 1, 2009 7:36 PM PDT.
Not too long ago, the courts disagreed with you.
BoA and other banks lost a class action suit for this very practice and yet, they get away with continuing this practice of juggling debits specifically to CAUSE an overdraft. Not to mention that they (the banks) can legally "hold" a check deposit for 10 days. So, while your register balance may show you have funds, the banks can say otherwise. Thus, your contention that people don't balance their checkbook no longer holds water.
responsible spending
Submitted by Franz on Sun Nov. 15, 2009 4:55 PM PST.
"Don't spend what you don't have."
Nice sentiment. I've done that for most of my life, but with wages stagnant and a car which needs new tires, what would you have me do? Endanger every other motorist on the road because stockholders matter more than paying me enough to live?
Let me guess, you're retired, after making your life under the old system of a good job, advancement within one career, one employer, and a pension. You have government-run health care, but you don't want anyone else to have it. Now, you expect all of us to create the same reality under our current system. IT AIN'T HAPPENING!
We've all been declared redundant in the current three-card-monty financial system.
BTW:: I have two college degrees, one tech certificate in electronics, and a forklift certification. Guess which one will get me a job!
Jesus is coming, look busy.
Dodd the populist
Submitted by g. powell on Mon Sep. 21, 2009 8:41 AM PDT.
So all of the sudden Chris Dodd is the bold defender of the financial consumer. I'm sure the fact that he is up for re-election next year and has had cozy relationships with failed institutions like Countrywide has nothing to do with it.
So why wasn't he on top of this 18 months ago?
Why, you ask?
Submitted by MarkH on Mon Sep. 21, 2009 10:05 AM PDT.
Probably because he wasn't very powerful as a member of the minority back then. I don't recall, but during the Clinton years when Dems controlled the White House and Congress ('93-'94) he probably wasn't the committee chair.
It's been a long dry spell for Democrats who have wanted to fix things.
Let's see what happens.
Submitted by jrw on Mon Sep. 21, 2009 8:48 AM PDT.
Chris Dodd has been such a friend of the finance industry over the years, I wonder if he's introducing this legislation knowing it will fail, but will make him look like a friend of the people at election time. Are there enough votes in Congress to support something like this, or will bank lobbying carry the day?
They can force you ...
Submitted by optical weenie on Mon Sep. 21, 2009 9:03 AM PDT.
... to accept a loan at 1000% interest whether you want it or not.
Much as I hate to have a position on an issue that sort of agrees with MacGrubby ...
Sorry Kevin, the bank is not forcing a person to overdraw their account.
Overdrawing your debit card is no different than writing a bad check. Keeping a running balance is not that difficult. It's just simple addition and subtraction. Why can't people get this?
No, it's not the same as writing a bad check.
Submitted by jrw on Mon Sep. 21, 2009 9:35 AM PDT.
A debit card transaction, as opposed to a check, can be verified in seconds. All that's required is that if there are insufficient funds to cover a transaction, the card should be declined. It's pretty simple. If people want to opt in to having the bank cover the transaction, they can.
This blanket coverage of overdrafts is not a case of nice banks just helping out those of us too dumb to add and subtract. It's a "financial innovation" that's designed, not for customer convenience, but as a revenue source. It didn't used to be the practice; it used to be no money, no purchase. That's how it should be.
So, all the moral huffing and puffing about responsibility could be put aside if banks would just do what they're supposed to do, not give people money the people don't have. But, given the prudence many banks have shown over the past decade that may be too much to ask. It seems that frequently they have been the ones who can't add and subtract.
Overdrawing your debit card
Submitted by Matt D (not verified) on Mon Sep. 21, 2009 10:05 AM PDT.
Overdrawing your debit card is no different than writing a bad check. Keeping a running balance is not that difficult. It's just simple addition and subtraction. Why can't people get this?
Well, possibly because their bank encourages them to use a single account for all their checking, saving, debit, credit, direct deposit, EFT, ATM, and online billpay needs. Possibly also because their bank has assorted counter-intuitive and largely undocumented policies on posting timelines for various transactions, funds availability, check card authorizations, $0/negative balance fees, quoted "available balance figures", etc, and generally reserves the right to engage in dubious practices like the aforementioned arrangement of withdrawls for maximum penalty. Or perhaps because their customer service reps are often clueless and give bad information, and the bank itself makes you jump through a million hoops to dispute charges (for instance, US Bank made me talk to the manager of the branch where I opened my checking account to dispute some overdraft fees).
Banks
Submitted by E L (not verified) on Mon Sep. 21, 2009 9:04 AM PDT.
"And there's a reason they can get away with it." And will get away with it. Any attempt ot fix financial issues through legislation and regulation will meet a Republican blitz of "Socialism" and a filibuster. And 62% of the people will tell you they love, repeat love, their bank just the way it is when Limbaugh and Beck have trashed financial reform.
The last time I paid an
Submitted by trotsky (not verified) on Mon Sep. 21, 2009 9:22 AM PDT.
The last time I paid an overdraft fee, I knew I was floating on the edge of my account because of rental deposit. Getting paid Friday, I went to the ATM on a Thursday night to check my balance. There was money, so i withdrew 20 bucks to go have a few beers. I later was charged an overdraft fee for the check and for the ATM withdrawal -- and the latter really ticked me off.
That said, thanks to the 50-dollar lesson about bankers' being pricks, I've kept careful track of my balance ever since. Sometimes I do have to wonder about people who just won't learn (and they seem to be legion, judging by the numbers).
hard times
Submitted by Anonymous (not verified) on Mon Sep. 21, 2009 9:52 AM PDT.
Trotsky. I don't think that it's a matter of "won't learn." I think it is a matter of being in a position where income is so tight that the individual has to creatively juggle when to buy groceries, pay the rent, maybe take a sick child to the doctor, etc. As someone who has been there, I totally get it and the desperation it can cause. To me the most egregious aspect is the re-sequencing of purchases done by the banks. The idea of taking a later purchase and moving it up in time so as to "domino" a bunch of earlier purchases over the line is indefensible and corrupt.
Couldn't agree more about
Submitted by Trotsky (not verified) on Mon Sep. 21, 2009 10:40 AM PDT.
Couldn't agree more about the sequencing. The bank at the time told me the check had already cleared even though the ATM showed I had a balance. This seems like a vestige of the check age (when processing times might well vary by a few days), but it's hard to see how to justify that in an age when 98 percent of transactions have a precise digital time stamp and are processed at computer speed..
Use cash whenever possible
Submitted by Greenback (not verified) on Mon Sep. 21, 2009 9:39 AM PDT.
I feel a bit stupid now- I had never put two and two re: commercials encouraging the ubiquitous use of debit cards and overdraft fees.
I hope debit card overdraft fees can be regulated, but the last I looked neither checks nor cash withdrawals will go through if there's not enough money in the account. I never pay with plastic unless it's an online purchase. For everything else I withdraw cash or check. That makes it easier to set weekly quotas. Besides, I'd prefer to not have my purchases tracked, insofar as that's still possible these days.
To change the subject- why is a nanny-government a bad thing, but there's nothing wrong with a nanny corporation?
Excellent question.
Submitted by jrw on Mon Sep. 21, 2009 10:05 AM PDT.
And this is the real problem with conservatism. I take liberalism to be nothing more than pragmatism, a willingness to question dogma and orthodoxy, to follow the course that leads to the best results.
But conservatism, at least to me, accepts things as "better" even if they're not. To conservatives, private enterprise is always better than government , not because it necessarily achieves better results, but just because it is. Even if private health insurance produces terrible outcomes, it's better by definition than government-enabled health care, and it always will be to conservatives. Same with corporations. They should be able to do whatever they want because they are inherently correct, while we the people, via our government, are hopeless, hapless incompetents. Just look at MacGruber's post for evidence of that thinking.
It's the same thing with so many things. A bellicose, unilateral foreign policy, abstinence-only sex education, mandatory sentencing, in so many areas, the outcomes don't matter, only the ideology. In fact, if the outcomes aren't good, it's time to double-down on the ideology. It's hard to argue with conservatives, because so often, they have decided on the answer before the discussion can take place.
people who won't learn
Submitted by some guy (not verified) on Mon Sep. 21, 2009 9:47 AM PDT.
@trotsky: it's easy to learn the lesson and avoid future fees when the transaction that ended up causing the overdraft is completely discretionary (i.e. going out for some beers). But for many people, and I've had this happen to me waiting for payday, the transaction that caused the overdraft was an essential purchase (buying enough gas to get to work, buying groceries to cook dinner, etc.). It's not that we haven't "learned our lesson" it's that once the dust has cleared from the original overdraft transgression and the bank has added $35 x ? in fees to the account, I am fucked until next week's pay, at which point I accidentally overdraft again buying an essential, and the bank charges fees again, etc repeat weekly into a sinking hole. You don't have to feel sorry for me, and in some ways the situation is my fault, but why is it legal for banks to continually prey upon people in this scenario? In order to get out of the sinkhole, I would either have to stop buying essentials, or earn more money, both of which are easier said than done. In the meantime, it would be nice if we just prevented the banks from fucking over people like me.
Been there, done that. My
Submitted by Trotsky (not verified) on Mon Sep. 21, 2009 10:45 AM PDT.
Been there, done that. My experience is that banks really don't want the business of their poor customers. That would actually make a debit card (as opposed to checks) that really did reject overdrafts a pretty good idea. But where's the fee revenue there?
The best thing you can do is
Submitted by Matt D (not verified) on Mon Sep. 21, 2009 10:56 AM PDT.
The best thing you can do is just get a credit card and pay your balance off each month. It's much, much easier to manage than having a million tiny purchased coming out of your checking account, and you can far more easily dispute charges.
within you and without you
Submitted by Anonymous (not verified) on Mon Sep. 21, 2009 1:14 PM PDT.
If you know how to live without credit, you can just walk away. Collection agencies will hound you, though. Welcome to the cash economy where it's quality of life rather than quantity.
What's going on?
Submitted by nepeta on Mon Sep. 21, 2009 10:23 AM PDT.
I've been getting "Notices of Change to Account"s from all my credit card companies. Despite my distaste for reading the incredibly small print of these notices, I actually have read enough to get the drift of their message. All of them state that according to a change in "regulations" their interest rates are rising, late fees are increasing, etc., etc. Looks like the banks are out to recover their recent losses from the little people, both with debit and credit cards. I have no idea what changed "regulations" they're talking about nor is anything specific mentioned. It would be interesting to know whether they're lying. What a bunch of ripoff artists.
act like too big to fail banks
Submitted by tpx on Mon Sep. 21, 2009 10:23 AM PDT.
Once a bank charges its customers overdraft fees, those customers should stop making deposits. Without deposits banks have no way of being paid for overdraft fees.
Give me a break
Submitted by Anonymous (not verified) on Mon Sep. 21, 2009 10:36 AM PDT.
Give me a break folks, pay your bill on time and don't spend more than you have and you will not have these problems. Where's the accountability of the consumer? If the banks fail to lend they get hit and when they do lend to risky people they, again, get hit.
It seems clearer and clearer
Submitted by Art Eclectic on Mon Sep. 21, 2009 10:39 AM PDT.
It seems clearer and clearer that the "conservative" viewpoint is that preying on the stupid and/or incompetent is fair game. Interesting philosophy, that.
Equally interesting that this is supposed to be the "Christian" part of America.
Credit unions are better
Submitted by anandine on Mon Sep. 21, 2009 12:03 PM PDT.
Let me take this opportunity to applaud my local credit union. If I overdraw my debit card, I have a $1000 line of credit at 6% attached to my account. When I get paid, I go online, pay the overdraft and a dollar or so interest. Paying interest on the amount they effectively lent me seems reasonable.
Credit Unions are where to put your money
Submitted by DrFood on Tue Sep. 22, 2009 11:28 AM PDT.
My credit union doesn't give automatic overdrafts complete with fees. This was really helpful when my husband paid a $780 bill late in a pay cycle. I was very annoyed that I had to give up my cart full of food at CostCo, but I would have been more annoyed if I'd been charged a fee for the "service."
Unfortunately, I have first
Submitted by Anonymous (not verified) on Mon Sep. 21, 2009 12:22 PM PDT.
Unfortunately, I have first hand experience with these fees as well as delayed electronic funds transfers and find the circumstances that bring about these fees and delayed transfers to often be patently unfair.
For banks to have the freedom to create a situation in which a bank's customers have no choice whether or not to opt in or out of the bank's "overdraft protection" (indeed, many banks do not even inform their customers of this "protection" when they open an account, I know I was not informed) is terribly unfair to the bank's customers.
Banks should be required to inform banking customers of any "overdraft protection" policies when the customer opens the account. This information should be clear and openly explained, and the customer should sign a form stating that they understand the policy and all of its ramifications.
The bank customer should also be allowed to opt-out of "overdraft protection" (or any other like plan by another name...after all, a rose by any other name will likely still have thorns).
The bank customer who already has an account(s) that have such plans attached should be contacted and allowed to choose whether or not they wish to have such a plan attached to their account as well as all the aspects of that plan, including all overdraft fee details. The customer should be required to indicate their choice. The bank should not be allowed to impose such that type of plan on their customers without their informed choice.
I was really shocked when my bank charged my account three times (and my bank charges the maximum allowed for overdraft fees) on one occasion. I had used my bank card three times that day. Two times I used it to get a cup of coffee. The third time, I used it to get some groceries.
The grocery charge caused my account to be overdrawn less than four dollars (after the charges for the coffees had been deducted), but instead of one overdraft charge, the bank arranged the deductions so that the largest was taken out first. That caused both the other, much smaller, charges to also incur overdraft fees, resulting in more than $100 in overdraft fees because of a single overdraft of less than four dollars.
When I contacted my bank to ask why the smaller charges hadn't been paid first, so that I would have only been charged one overdraft fee, I was told that their policy was to pay the largest charges first. According to the bank's policy they are assuming that the larger charges are "more important".
This is creative accounting that does not benefit the customer, but instead benefits the bank by reaping all the overdraft charges possible from their customers.
Banks complain that if they are not able to have these charges they will have to give up their "free checking" and/or other free services.
I know that I would happily pay for my checking account if it would free me from the worry that one small overdraft could result in multiple overdraft charges because of “overdraft protection”!
Even better, if, when I gave my card to the grocery clerk to pay for my order, the charge would have been declined! I could have used cash, or another bank card, or a credit card, or just put something back.
Banks should not be allowed to overdraft their customer's accounts without first notifying them that the charge will indeed place their account into overdraft. Credit card companies decline charges. Banks can do the same. The technology is there.
When banking customers check their account balances, they should see the actual, true balance and not a balance that reflects any additional funds the bank would make available should the customer overdraft the account, as is the policy of some banks. That is a deceptive policy and encourages the customer to unknowingly overdraft their account, incurring fees.
In short, banks should not be allowed to deceive their customers by creating and using policies of which their customers are unaware. When I told my bank that I was not told about their “overdraft protection” when I opened my banking account, I was told that the bank did not have to inform their customers of their “overdraft protection” policies because the implementation of the policies were “a judgment call”. This is simply an end run around informing customers of a policy that is not to their benefit, and should not be allowed
Also, electronic funds transfers should be credited to the customers accounts as soon as they are received by the bank. My bank holds electronic deposit funds sent to my account for the maximum time allowed, but when electronic funds are withdrawn from my account, they are taken out immediately.
Interestingly, the day I was charged three overdraft charges, there was a large electronic funds deposit for my account being held by my bank. Since they were holding it for the maximum time allowed, it was not applied to my account until the next day, after my account was charged $100+ in overdraft fees.
Again, just like with your
Submitted by James2 (not verified) on Mon Sep. 21, 2009 1:46 PM PDT.
Again, just like with your views on those evil payday lenders, you seem to be overlooking the obvious: people obviously don't mind paying the overdraft fees, because they continue to use their cards.
I know you think your judgment is far superior to all those peons below you who are getting abused by the banks, but maybe, just maybe, they know their situation better than you do. Maybe it's entirely worth it to them to be able to buy that last week's worth of groceries for an extra $18 charge, even if that equates to a 1000% APR loan. Clearly, if it wasn't worth it to them, they would tell the bank to fuck off after the first overdraft charge they received and use some other form of payment.
Really? You're comparing
Submitted by James2 (not verified) on Mon Sep. 21, 2009 8:39 PM PDT.
Really? You're comparing banks, who provide money to its users who don't have it in their account, to a guy that rapes and kidnaps a 12 year old girl...
Why do you think people are powerless? Is there only one bank in the entire country? Is a debit card the only way to pay for things?
banks provide money against the will of its clients
Submitted by tpx on Tue Sep. 22, 2009 1:07 PM PDT.
Most individuals are powerless when confronted with institutions worth billions, which employ thousands and which use strategies formed by the extremely well educated to exploit individuals with little education and no financial expertise. In addition, people are powerless when institutions as powerful as the banks are aided by the political economy to give them immense legal powers to manipulate the services they offer without their clients' consent. Instead of the government protecting people from exploitation from institutions like the banks, the banks have co-opted the government to protect themselves from having to deal transparently and equitably with their clients.
A retired couple, neo-con Republicans, who would accept the theme it is the individual's responsibility to not overdraw their accounts, have had trouble with a bank regarding a trust fund set up by one of the couple's grandparents. The bank stopped their monthly payment from the fund and began disbursing it to others on the fund, who, this couple contends, should not be be receiving any payments until the one who's grandparents set up the fund expires. They have started a legal challenge to the bank that administers the trust fund. The bank that administers the trust fund is using funds from the trust to pay the bank's legal expenses. There is no end in sight to the legal wrangling. Even relatively wealthy people, like these W. Bush worshipers, are abused by banks, because the banks have the power and they have none or very little.
"Instead of the government
Submitted by James2 (not verified) on Tue Sep. 22, 2009 3:42 PM PDT.
"Instead of the government protecting people from exploitation from institutions like the banks, the banks have co-opted the government to protect themselves from having to deal transparently and equitably with their clients."
So why, in holy hell, do you think it's a good idea to give these very politicians MORE power over your life? I can't understand this logic at all. What do you think will happen if you give them more power to regulate those they are in bed with? Do you think this will make it better for consumers, or do you think they will impose restrictions that make competition less likely, as they inevitably do? This is like saying "Well, he did stab his entire family to death, but I still think we should buy him a sharper knife."
It is a dilemma, but the
Submitted by tpx on Wed Sep. 23, 2009 7:51 AM PDT.
It is a dilemma, but the government is the only source of power that represents all the people, even if it often times does not, that can successfully confront the power of the corporations. At least in America, politics can offer the chance to change who the peoples' representatives are, providing a kernel for change. There is no other source of political or economic power that individuals can turn to to confront the power of the corporations besides direct violence, which is what people will choose when they no longer have confidence in the legitimacy of their rulers, which you do not seem to have.
Well, as you say yourself,
Submitted by James2 (not verified) on Wed Sep. 23, 2009 3:38 PM PDT.
Well, as you say yourself, the government in no way represents all of the people. The point of pretty much all of my posts on this board is that those in government rarely even represent the interests of those who vote for them.
Your idea that "there is no other source of political or economic power that individuals can turn to to confront the power of the corporations besides direct violence." Is ludicrous. Stop doing business with the companies that abuse customers like this. My bank doesn't engage in these practices. I know for a fact that other banks I don't frequent don't engage in these practices either. You still have choices, which means you still have power. However, if you grant regulators more power, you will effectively be eliminating these choices.
Regulators have ONLY 2 levers to play with: increasing costs and reducing supply. They can increase the cost of doing business, which means less competition takes place, which concentrates power. They can also reduce the supply of banks via legislation, which also has the effect of concentrating power in fewer banks. Whichever option you choose inevitably leads to fewer choices, poorer service, and exactly the sort of problems you cry foul against here.
I did exactly that. The
Submitted by Hate Nat City (not verified) on Fri Sep. 25, 2009 5:09 PM PDT.
I did exactly that. The first time National City screwed me with 3 overages for one calculation / timing error.. I went back to the branch and handed the checkbook and the debit card to the manager. I've never gone back since. Credit unions are the way to go.
When i first had my debit
Submitted by Mtmorganism (not verified) on Mon Sep. 21, 2009 3:03 PM PDT.
When i first had my debit card thru Norwest Bank, then Wells Fargo, if there was not enough balance in my acct to pay a charge, the transaction was cancelled, not put through.
I actually had a seperate overdraft acct linked in, but this was not tapped for a debit transaction.
I never opted-in to a change to a overlimit authorization, and don't know how they changed this on my acct without my express authorization.
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