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Posted 11/13/09 1:38 PM jwfox1965 Las Vegas, NV | "and help to address widespread complaints that consumers who were unaware they had insufficient funds were being charged exorbitant fees for purchasing a cup of coffee, for example."
Just what this country needs, more government protecting people from there own stupidity..... If you overdraft your bank account buying a cup of coffee the bank SHOULD charge you an exorbitant overdraft fee, they should start calling it a "stupidity tax". When will Americans start taking responsibility for their own mistakes? |
Posted 11/13/09 5:11 PM erastus Saint Joseph, MI | Well, this one pulls me in two directions. As a libertarian, I know there should be no regulations over this. However, jwfox1965, I have to say you don't understand. People make honest mistakes -- everyone does -- and banks screw their customers as often as possible. Case in point:
Our old credit union would not allow a customer to accidentally overdraft at the ATM. The ATM would simply deny you, with the message "insufficient funds for this request". When my son went away for college, he opened an account at a big-name bank. One day he made an ATM withdrawal after miscalculating his balance. The ATM gave him the money, even though the funds were insufficient. He was charged $35 overdraft immediately. If he had been at our credit union that would not have happened. When he told the bank that he was shocked they would give him cash he didn't have in his account, the bank would not back down on the fee. In another case, I deposited cash into a bank's ATM for my son. The ATM plainly stated that cash deposited into the cash machine is available immediately. I deposited the cash and called my son to tell him it was there. He made a withdrawal about 15 minutes later, and the bank charged him an overdraft. I called the 800 number and raised hell, and got nowhere. Then I went into the local branch and raised hell. I showed them the ATM receipt. They backed down. Point is, banks screw their customers long, hard and often. My guess is that the Fed is doing this to take some of the heat off; to make them 'more popular' or something... |
Posted 11/13/09 6:12 PM LizLiz Brooklyn(or Cresco,PA!) , NY | ^ Yes.. I once overdrafted - the bank miscalculated my balance (I asked him if such and such checks went through etc) and they told me yes.. I listened to them and went about my daily purchases.. only to find out such and such checks didn't go through yet. HSBC was not so kind - my overdraft fee was 150 dollars? Shame I didn't have a recording of the conversation I had telling me my account was up to date with transactions.
But at the same time, my fault... I should always be doing the math myself,writing everything down, and not relying on the bank to do it for me. |
| Posted 11/13/09 8:39 PM jbo5112 Kansas City, MO | Part of the problem with overdraft fees is that you get charged every few days. In Rochester NY, most of the banks I looked at could end up charging you over $200/wk in fees. On top of that I was helping one of my friends with some overdrafts fee, and the bank illegally mis-reported her funds. The ATM was legally required to have all of the day's transactions posted by midnight, but in the next day or two, more transactions were posted for that day.
It may be a stupid fee to get charged, but I think it's usually poorer people who get hit with them. It's an obscene business practice to pick on the poor. Also, there can't be much market regulation against a poor business practice, when it's a difficult market to enter and all the businesses have the practice. |
| Posted 11/14/09 12:04 PM Rob Vollat Randleman, NC | I think a base route of this argument is that banks screw their customers. Which is an argument I concur with. As jbo5112 stated, I think it is the poorer people who are hit with these fees. After you've over drafted, for whatever reason you may have, they hit you with re-occurring fees charging you hundreds a week in some cases from my personal experience.
The government should protect the consumer in this case, why should they be allowed to dig you a deeper hole when clearly you are broke to begin with. I see nothing bad in regulating overdraft penalties. |
| Posted 11/14/09 4:40 PM 2ndClassCitizen Princeville, HI | Clearly the Fed is trying desperately to improve their tattered image in the wake of the banking crash and the Audit the Fed movement.
I agree with Rob Vollat. The government has call to protect the individuals from the corporations. Overdraft fees are money generating offenses just like speeding tickets are for local and state governments. Government has every right to regulate these abuses of power. I can't charge a fee when a bank error wastes a bunch of my time, why should they be able to charge me a fee when my error causes them a minor inconvenience? |
| Posted 11/14/09 6:39 PM Flaiyer Bakersfield, CA | While it may feel ridiculous to you that banks charge these fees, they are still well within their rights to do so. You are coming to them and they are providing you a service. They have a fee structure associated with this.
At any time you are free to find another bank and go there. That's how markets work. People get what they want by going where their money has the most value. If you don't like your bank charging you an overdraft fee you should find one that does not do so. Supporting regulation like this is really no different then asking the government to pay for your healthcare because it is ridiculous that you should have to pay so much for it. |
Posted 11/15/09 02:08 AM slickrickjamesbrown Mountain View, CA | I'm not completely against this type of regulation, but I don't see any reason for the Federal Government and especially not the Fed to be the ones making a call on this. How about this for a regulation, if you are about to overdraft your account, you should be told that you have insufficient funds and if you feel the immediate cash is worth the fee you say ok. The bank shouldn't be allowed to misrepresent the amount of available funds in your account. |
| Posted 11/15/09 1:55 PM coolgc Newalla, OK | I don't believe this law should go into effect, but i'm one of those people who was charge fee after fee daily by a bank and it got to a point that I couldn't even pay it it had gotten so high. I bank with one bank who would charge an overdraft fee and if you didn't have your account at a positive within 5 days they would close it. Not a bad idea. True, people should take responsibility for there own actions but banks make most of there profits from overdraft fees. I got one of those prepaid debit cards besides the checking account it setup (the prepaid debit card) so you can't spend more then you have on it. |
| Posted 11/16/09 10:04 AM redshirt Philadelphia, PA | Change banks. |
| Posted 11/16/09 1:36 PM pearl Syracuse, NY | I totally agree with Erastus. This is a case of banks dishonestly taking advantage of their knowledge of an account to the detriment of the customer. In these times of instant access to the account balance, the bank is honor bound to share the status of the account with their customer, who is certainly due some service for the benefits the bank derives from their business. This is "gotcha" banking and any bank that practices it is being dishonest. |
| Posted 11/18/09 10:31 AM jbo5112 Kansas City, MO | Flaiyer, people are often unable to switch to a bank that doesn't charge the fees. Some banks charge you a fee for not keeping your account open long enough, and some places don't have any banks without the fees, except for some employee credit unions. On top of that, many banks do accounting back flips with your account information to hide your current balance information as much as the laws will allow, and some even have a time frame where your deposits are unusable. It's much easier to write banking software that transfers money immediately than software that delays transactions and places locks on money.
Your credit rating is also penalized for switching banking services because they like to see accounts that have been open for a long time. Sometimes you open an account with one bank where you like the services and fees, then someone else that you don't like buys the bank or they just change the services and fees themselves. The bank agreements all give them that option. Banking, by its nature, is a difficult business to get into, and government regulations compound the problem. If we have government regulations on banks, they should at least require people to opt-in to overdraft services on transactions where your account can easily be verified before any exchange is made (atm's and purchase, not checks or automatic payments). We've already created enough problems with FDIC and a culture of people not caring much about the state and conditions of their bank. Personally, I'd rather see communities evicting the businesses that don't operate with kindness and decency, but I'll take this regulation either way. I'm also glad to see the debate being on the issue of whether it should be done or not, instead of whether we're going to burden businesses with enough regulation. |
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