No More Overdraft Fees (Takes Effect Next Year)

[Bon]

http://gyantunplugged.com/real-news/...verdraft-fees/

For all who are getting eaten alive by rampant overdraft fees from your financial institutions, the Federal Reserve have just passed a new law that’s gonna put money right back in your project.

According to a new report, consumers will no longer be hit with unexpected overdraft fees under new federal rules that take effect next summer.

The rules also prohibit financial institutions from discriminating against consumers who do not opt in. Banks must provide those customers with the same account terms, conditions and features — including pricing — they provide customers who do opt in, the board said.

Fees collected by U.S. banks from all consumer overdrafts, including checks, are projected to hit about $38 billion this year alone.

That’s insane!

It’s about damn time somebody did something.

Under the Fed’s new rule, which will take effect July 1, 2010 banks will be required to notify new and existing customers of their overdraft services and give customers the option of being covered.

Report found here: http://www.suntimes.com/business/188...raft13.article

[marcus]

Re: No More Overdraft Fees (Takes Effect Next Year)

Ehhhhh...

There's not much info on this "service" and I'm immensely curious about it. Banks make a huge chunk of their money from overdrafts and to me this will allow people to go massively into debt simply because they're no longer being charged $30 per overdraft.

There's got to be some kind of restriction on this and I have a feeling it's going to be worse than a small fee every time you overdraft. Perhaps you'll be restricted to only -100$ or so in your account as opposed to -300$ (which is what my bank limits me).

Seriously, I've never had to pull out money I don't have. To me, overdraft is punishment for people with poor monetary management. I'm making a huge generalization here, but every single person I know (which is, admittedly, like 5) who complain about overdraft are the kind of douchebags that pay the minimum on bills then withdraw 100 bucks for concert tickets and spend another 50 on booze.

[Valkysas]

Re: No More Overdraft Fees (Takes Effect Next Year)

my bank once withdrew an account maintenance fee from my checking account 2 weeks ahead of time just so they could hit me with an overdraft fee because my balance was so low (maybe like a dollar was in there).

of course, they've also repeatedly taken money out of my checking account and claimed I did it, despite no activity on the account ever be recorded. my balance would just change. I've always been able to get the money put back in though.

I should really switch banks.

but I'm kinda lazy.

[Denmo]

Re: No More Overdraft Fees (Takes Effect Next Year)

It's pretty ridiculous to get hit with a $35 fee for going $1 over, and another $35 for every last transaction you make no matter how small.

[Cutter De Blanc]

Re: No More Overdraft Fees (Takes Effect Next Year)

Perhaps they'll just make it so you WON'T BE ABLE TO SPEND MONEY YOU DON'T HAVE. That'd be great.

[Big Rick Cook]

Re: No More Overdraft Fees (Takes Effect Next Year)

Perhaps they'll just make it so you WON'T BE ABLE TO SPEND MONEY YOU DON'T HAVE. That'd be great.

They used to. At least my bank used to.

[Sampson]

Re: No More Overdraft Fees (Takes Effect Next Year)

I'm kind of ****** off about this.

Most of the people I know who ***** about overdraft fees do it chronically. They're the type of people that spend recklessly and don't check their balance on a regular basis.

I know the banks are going to try to make this money back somewhere else...my question is where? Am I going to have pay more for checks? Have higher fees on ATMs? Essentially, this is (probably) going to force prudent people to pay for the mistakes of others.

[Ryner]

Re: No More Overdraft Fees (Takes Effect Next Year)

Yeah maybe people should stop f-ing up and blaming the banks.

[John Mora]

Re: No More Overdraft Fees (Takes Effect Next Year)

Yeah, I can understand living paycheck to paycheck, but I've never spent more money than I've had.

[Sampson]

Re: No More Overdraft Fees (Takes Effect Next Year)

Yeah maybe people should stop f-ing up and blaming the banks.

Further, the overdraft fee is actually useful in the right situations.

It's a short-term lone.

Let's say you have $50 in your account. Your car breaks down and you need to get it towed. Unfortunately, the cost of the towing is $200. If your bank simply cut you off at $50, you'd be SOL.

Or, lets say you go to a restaurant. You thought you had money in your wallet. But, after eating, you realize that you forget that you spent it earlier. You have $6 in your checking account. Without the ability to overdraft, you either have to borrow money from a friend, run out the back door, or get the cops called on you.

A debit card is a symbolic representation of cash. Let's pretend you didn't have a debit card, and only had cash. Would you walk into a store and arbitrarily start buying things without first counting the money in your wallet? Of course not. So why would you buy things using your debit card without checking your balance?

If you want to use your debit card like a credit card, get a credit card.

[Denmo]

Re: No More Overdraft Fees (Takes Effect Next Year)

More then once I've been tricked into paying 3-4 overdraft charges for what should've been only 1. I would make lots of small purchases before paying rent, and make the mistake of going over a few dollars.

They kept all those small purchases in limbo until the rent check cleared, ignoring the timeline. That way, they could count all those smaller purchases as overdrafts instead of just my check, and I end up with $150 in overdraft fees.

There's a difference between being irresponsible and being conned out of your money.

Further, the overdraft fee is actually useful in the right situations.

It's a short-term lone.

Let's say you have $50 in your account. Your car breaks down and you need to get it towed. Unfortunately, the cost of the towing is $200. If your bank simply cut you off at $50, you'd be SOL.

Or, lets say you go to a restaurant. You thought you had money in your wallet. But, after eating, you realize that you forget that you spent it earlier. You have $6 in your checking account. Without the ability to overdraft, you either have to borrow money from a friend, run out the back door, or get the cops called on you.

...

If you want to use your debit card like a credit card, get a credit card.

You just ruined your own argument.

[Sampson]

Re: No More Overdraft Fees (Takes Effect Next Year)

More then once I've been tricked into paying 3-4 overdraft charges for what should've been only 1. I would make lots of small purchases before paying rent, and make the mistake of going over a few dollars.

They kept all those small purchases in limbo until the rent check cleared, ignoring the timeline. That way, they could count all those smaller purchases as overdrafts instead of just my check, and I end up with $150 in overdraft fees.

There's a difference between being irresponsible and being conned out of your money.

I agree. That's just douchey. I would complain until you got your money back, then switch banks.

[Denmo]

Re: No More Overdraft Fees (Takes Effect Next Year)

I'm OK with the idea of overdrafting. But I think that any money you use below your balance should be paid back with heavy interest, not a $35 fee.

Or maybe it should be transfered over to your Credit Card account. I mean, my debit card is able to swipe as a credit card, why not take it a step further?

[The Toecutter]

Re: No More Overdraft Fees (Takes Effect Next Year)

IMO, simply requiring the banks to notify their customer when an overdraft fee will be applied(in the event that they swipe their debit card with insufficient funds), which would give them the simple option to overdraw or not(and pay the fee, or not), should be sufficient. Anything more than this will lead to unforseen consequences(perhaps similar to what Sampson mentioned), nevermind the fact that it is not the government's responsibility to begin with.

[Sampson]

Re: No More Overdraft Fees (Takes Effect Next Year)

IMO, simply requiring the banks to notify their customer when an overdraft fee will be applied(in the event that they swipe their debit card with insufficient funds), which would give them the simple option to overdraw or not(and pay the fee, or not), should be sufficient. Anything more than this will lead to unforseen consequences(perhaps similar to what Sampson mentioned), nevermind the fact that it is not the government's responsibility to begin with.

That's probably the most ideal solution, and seems easy to implement.