Banks will agree to limits on overdraft protection plans, services used to cover customers who withdraw or spend more than their accounts hold. The programs can spare customers the embarrassment of bouncing a check but not without significant costs that have many consumers up in arms. They complain of being enrolled in such programs without their consent and of getting hit with lofty fees without any warning.
Congress is paying close attention to the complaints. Lawmakers are threatening to pass a bill cracking down on several common practices, including automatic enrollment and hidden fees. To forestall legislation they fear will go too far, industry groups will move on their own to adopt some of the bill's provisions to assuage consumer concerns and forestall a law that banks fear will go too far.
Overdraft fees have morphed into a big money-maker for lenders, exceeding $19 billion this year -- up 85% from 2004. Banks charge as much as $35 for a check, ATM withdrawal or debit purchase when funds to cover them are lacking, even if it's a $2 cup of coffee that puts a customer into overdraft territory. The sharp increase in total fees is largely due to two factors: The increasing use of debit cards and the fact that many banks automatically enroll customers in overdraft programs without them knowing about it.
Bank reforms will include more disclosure and a requirement that consumers "opt-in," providing written consent that they want overdraft coverage and agree to the fees.
Lenders will also give consumers less-costly options when they open an account. For example, for a marginal fee they'll be given the choice of linking their checking account to a savings account or credit card to cover the difference when the funds are overdrawn. Many banks will also begin to employ a tiered overdraft system that waives fees for the first overdraft and gradually bumps up charges each time too much money is taken out. Plus, more ATMs will be programmed to give warnings and list fees when users try to withdraw more than what they have in their accounts.
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POSTED BY: Phil (December 15, 2007 11:45 AM)
Bank (Hold) period, it's during that hold period that the Bank gets you with overdraft charges or NSF fees. The Bank's computer factors in the holds against the balance in your account.
Hold amounts should not have anything to do with putting your account into overdraft.
A Hold is money that hasn't been sent out yet by the Bank, or in banking lingo, it hasn't hard posted yet.
Besides that a lot of holds get dropped off without the bank ever sending money out to anyone. They never get posted or turn into hard transactions.
But, if you have those invalid holds against your account, the Bank's computer is very likely to kick out a NSF fee or overdraft charge if the account balance is below the hold amounts.
When the Bank goes to clear that hold, (hard post the transaction) or (send the funds out) however you what to say it, that should be the only time that the Bank's computer should be able to kick out an overdraft or NSF fee.
Do you understand what I'm saying? If the funds aren’t available in the customer's account at the time transaction gets hard posted, (the Bank sends out the money) that should be the only time that a overdraft charge or NSF fee should be allowed to be generated.
Until the money actual leaves the control of the Bank, I don't care what status the Bank says that it's in, for their accounting purposes, call it a hold status or whatever. The bottom line is, the Bank still has the money, and it's the customer's money, until the Bank sends it out.
Check21 was passed by Congress to stop people from as they say from (floating checks). As it stands today the Bank is (floating transactions) from the use of (holds) against customer accounts. The difference being is that the Bank's are making Billion's of dollars a year off the backs of their customer's the way that they're doing it.
I heard the expression one time that," if a man steals $20.00 you call him a thief," but if a man steals 20 Million dollars you call him a banker."
I used to think that expression was funny, but now I believe it to be true.
Here's another expression," the Bank steals our money, and Congress drives the getaway car."
Let's hope for the sake of all the hard working American people, that this expression is not proved to be true also.
POSTED BY: Don (July 12, 2008 12:20 PM)
i am on social security and my SS check is deposited on the 3rd of every mouth. this month i overdrew by 50 cents. the bank charged me 35 dollar. then they held my SS money for 4 days not paying any check i wrote for rent,food... then on the forth day the bank started to pay my check but using the total amount plus the overdraft and the 35 dollar charge. that made me overdraw again. then again. my overdraft fees ended up being 469 dollars. and my rent check bounced too. now i have no money, no bills were payed for this mouth and there are 20 dollar fee to make good on each of the bounced checks. i just don't know where to turn. the worst is that now the bank is charging me 6 dollars a day. for not paying the over draftfees.
POSTED BY: Aggrevated (September 29, 2008 06:05 PM)
BOA and the other banks all have the same policy and I'm not buying the "can't set the $500 limit to $0" party line. So far this year it's cost me over $800 to bank with them. I switched to INGDirect who don't charge a $35 transaction fee, they do charge 9% interest on on any overdraft amount. The only way to make banks listen is by voting with your cash and banking elsewhere.