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The Fed is proposing a new rule governing Banks' egregious overdraft fees, but it's weak and they need our help to make it stronger.

They are proposing a rule whether banks should be required to offer customers opt-in to overdraft programs or whether an opt–out mechanism is sufficient. The proposed rule deals solely with electronic fund transfers.

You can make a difference by:

I. Contacting the Fed by email at: regs.comments@federalreserve.gov.  Make sure the docket number Docket No. R-1343 is in the subject line.

Ask the Fed to beef up it's proposal by including the following modest  characteristics of Maloney's(D-NY) bill - HR-946:

A. Require notice to customers when an ATM or point-of-sale debit card transaction is about to trigger an overdraft

B.Require an opportunity for account holders to choose to have an overdraft plan or not. (FDIC reports that over 75% of surveyed banks automatically force their customers into an overdraft program and some do not allow customers to opt out and that isn't right.)

C. Prohibit manipulation of the order of posting deposits and withdrawals so as to maximize overdraft fees. (Charging the largest posting first even if it was the last thing you purchased that day so thay you pay mulitple OD fees instead one on the big ticket purchase.)

II. Contact your congressperson and tell them you support passage of HR 946, beefing up the FED rule and let them know how you feel about the following:  

a. The GAO released a report showing that consumers are not told about, and can’t avoid, many overdraft fees.

b. In 2007, from the nonpartisan Center for Responsible Lending - Customers pay $17.5 billion annually in overdraft fees, up 70% from the $10.3 billion they paid in 2004.

III. Get out of the big banks and get into a local credit union or bank.

Originally posted to JerichoJ8 on Tue Dec 30, 2008 at 08:39 PM PST.

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Comment Preferences

  •  this is very necessary (20+ / 0-)

    I must have rang up about $700 in overdraft charges on my BoA card without knowing, and they don't have a mechanism to prevent this. I guess they want you to keep spending your money and not think about it!

    •  The certainly have a mechanism to promote it (6+ / 0-)

      It's time for the Third Estate to sick the fish mongers on em...

      by JerichoJ8 on Tue Dec 30, 2008 at 08:50:36 PM PST

      [ Parent ]

      •  well i just went to the bank (11+ / 0-)

        I went down to my BoA by my house to go deposit my final paycheck from my last job. I had a number of overdraft fees appear on my card before -- well, this time, when I logged onto my ATM card thinking there would be only $.76 in the checking account since thats what I had last I checked the other day, and the system posted another $100 overdraft protection from my VISA card, maxing it out and putting it over the limit.

        WHAT THE FUCK BANK OF AMERICA, I DIDN'T ASK FOR OVERDRAFT PROTECTION AND SURE AS HELL DIDN'T NEED IT. Thanks again, I just got charged another $70 in overage charges that I didn't ask for. I can't even pay off $4000 in credit card debt like this -- not to mention $8000 more in student debt, and now that I got fired and I can't find a job because of the fact that the job market is dead and I have an assault record from 7 years ago when I was 18 which disqualifies me from just about anything, I'm completely stuck and out of options. And while I'm taking it in the ass every which way from banks, jobs, bosses shafting me pay, not being able to pay for health insurance, still living at my parents house because I can't afford to pay out obscene rents, I'm broke and I have no idea what the fuck I'm going to do with myself. Meanwhile, some dipshit Merril Lynch CEO just bought himself a $35 million dollar apartment with my pennies I was forced to pay into the bailout!!!

  •  Thanks for posting this. (6+ / 0-)

    I thankfully don't have this problem since I switched to a credit union and got rid of the debit card. Cash only, baby!

    also, like such as. also.

    by ghostlawns on Tue Dec 30, 2008 at 08:56:11 PM PST

  •  Thanks for this (7+ / 0-)

    it's one of my pet peeves.

    I don't have a tin foil hat, mine's cotton. Tin foil is overpriced due to collusion between Alcoa Corporation, Lizard People and Area 51.

    by CornSyrupAwareness on Tue Dec 30, 2008 at 09:01:17 PM PST

  •  The only problem I see with Maloney's adds (1+ / 0-)
    Recommended by:
    walkshills

    is in A.  

    If an ATM or POS machine KNOWS you don't have the money, ie 'youll trigger an overdraft' they're already going to reject the transaction.  The credit card software has no idea whether or not you have overdraft accounts, so it just fails to auth the transaction.

    If though, somehow they don't know you have the money, they're not going to know to reject your transaction or notify you.

    The reason overdrafts happen is because people accept transactions from multiple sources and they don't all hit the bank in realtime.  If they did, overdrafts simply wouldn't happen, because the first such transaction that would be over would simply be rejected/bounced.

    Now if you DON'T want some transactions bounced, then you join an overdraft scheme.  But that still won't let you make credit card transactions when you have no money - it'll just allow you to write bad checks without them bouncing.

    Hi. If I quit replying to your comments, I've either A) left the thread, B) felt it didn't require a reply, or C) decided you're an idiot. You choose.

    by drbloodaxe on Tue Dec 30, 2008 at 09:05:48 PM PST

  •  OK I e-mailed 2 senators and 1 congresswoman (1+ / 0-)
    Recommended by:
    JerichoJ8

    Boxer, Feinstein and Anna Eshoo.

    As for part III. I don't have any money to switch banks. But when I do, I'll be headed to my community bank. I actually was in a community bank and it got swallowed up by a big boy bank.

    I don't have a tin foil hat, mine's cotton. Tin foil is overpriced due to collusion between Alcoa Corporation, Lizard People and Area 51.

    by CornSyrupAwareness on Tue Dec 30, 2008 at 09:10:40 PM PST

  •  I dumped overdraft protection years ago. (3+ / 0-)

    Yet, I agree. If the bank and you have that agreement, they should not let you get screwed over because of it.

    Wean yourselves away. Things are getting tighter.

    "They pour syrup on shit and tell us it's hotcakes." Meteor Blades

    by JugOPunch on Tue Dec 30, 2008 at 09:17:25 PM PST

    •  My bank wouldnt let me (2+ / 0-)
      Recommended by:
      JugOPunch, JerichoJ8

      I just asked about two weeks ago for them to shut off all overdrafts. You have to open a savings account and put money in it, and pay for overdraft protection. My bank = Comerica.

      I don't have a tin foil hat, mine's cotton. Tin foil is overpriced due to collusion between Alcoa Corporation, Lizard People and Area 51.

      by CornSyrupAwareness on Tue Dec 30, 2008 at 09:18:46 PM PST

      [ Parent ]

      •  short for Corporate America (2+ / 0-)
        Recommended by:
        JugOPunch, CornSyrupAwareness

        It's time for the Third Estate to sick the fish mongers on em...

        by JerichoJ8 on Tue Dec 30, 2008 at 09:23:00 PM PST

        [ Parent ]

        •  I really like these quotes (5+ / 0-)

          fed press release

          From the industry’s perspective, automated overdraft services enable institutions to reduce the cost of manually reviewing individual items, and also ensure that all consumers are treated consistently with respect to overdraft payment decisions. Industry representatives observe that whether an overdrawn check is paid or returned, the consumer will be charged the same amount by then consumer’s financial institution. Industry representatives also assert, however, that when an overdrawn check is paid, consumers receive significant benefits because they can avoid additional fees that would be charged by the merchant if the item was returned unpaid, and other adverse consequences, such as the furnishing of negative information to a consumer reporting agency.

          Of course they talk about checks and not the more common tool for overdrafts, the atm. Which they could easily reject.

          In contrast, consumer groups assert that overdraft transactions are a high-cost form of lending that trap low- and moderate-income consumers into paying high fees. Consumer groups also state that consumers are often enrolled in overdraft services automatically without their request or consent. In addition, consumer groups believe that by honoring overdrafts, institutions encourage consumer reliance on the service and therefore, consumers incur greater costs in the long run than they would if the transactions were not honored. Consumer groups note, for example, that historically, institutions declined a consumer’s request for an ATM withdrawal or debit card transaction if the consumer did not have sufficient funds in his or her account. Today,
          however, institutions are more likely to cover those overdrafts and assess a fee on the consumer’s account for doing so. According to consumer groups, this practice can be particularly costly in connection with debit card overdrafts because the dollar amount of the fee is likely to considerably exceed the dollar amount of the overdraft. In addition, multiple fees may be assessed in a single day for a series of small-dollar transactions. Because of these costs, consumer groups assert that most consumers would prefer that their bank decline debit card transactions if the transactions would overdraw their
          account.

          I don't have a tin foil hat, mine's cotton. Tin foil is overpriced due to collusion between Alcoa Corporation, Lizard People and Area 51.

          by CornSyrupAwareness on Tue Dec 30, 2008 at 09:32:22 PM PST

          [ Parent ]

  •  feel good BS (6+ / 0-)

    This is all well and good, but if a quarter of our banks go under (which they will) this seems to be closing the barn door after the cows are out.

    I use those fuckers U.S. Bank and they're most excellent at turning a $0.90 error on my part into a $100 cash cow for them. I hope they're one of the ones to die ...

  •  This is what's screwed up about my bank (3+ / 0-)

    If the bank is open during normal business hours, if my checking goes into negative, the bank simply pulls from my savings to cover the amount I am in negative in checking.  No fee.

    But, as I found out over Christmas, if the bank is closed, my bank charges a fee to move MY money from savings to checking.


    The year is going, let him go; Ring out the false, ring in the true. --Lord Tennyson

    by COkdub on Tue Dec 30, 2008 at 09:38:24 PM PST

  •  A teller at Washington Mutual told me (6+ / 0-)

    that the reason they can/have made most of their accounts free with no minimum balance is that it makes people more likely to overdraft the account and trigger the fees. The fees those people pay cover the cost of administering my account for free.

    Fry, don't be a hero! It's not covered by our health plan!

    by elfling on Tue Dec 30, 2008 at 09:58:59 PM PST

  •  I changed from BoA (3+ / 0-)
    Recommended by:
    bablhous, danger durden, JerichoJ8

    almost two years ago. Their fees are ridiculous on everything.

    What triggered my exodus was the pay-as-you-go phone from Virgin that I set up for my oldest daughter after her husband (at the time) went off to Iraq. The month that did us both in was when I traveled down to San Diego to pick her up and bring her back to the Northwest - not realizing that the Virgin Mobile account had a trigger option to "top off" the account with $5 pulled from my bank account whenever she was close to her minutes limit.

    Within a week's time, the trigger was activated almost 50 times when I wasn't watching my bank account (while on the trip). BoA charged an overdraft on over 20 of those trigger withdrawals in a 24 hour period when I had a gap between end of balance in my account (due to a hold  of $300 placed by Avis for the one-way rental car I rented) and my paycheck direct deposit.

    Over $700 in overdraft in a twenty four hour period. I have the bank statement to prove it.

    I changed to a local Pacific NW bank - Banner Bank, which I highly recommend for any of you living in Idaho, WA state, Oregon, and I think, Arizona. There have been a few occasions when I had an overdraft that was created during the day and as long as I got a deposit in before closing time, they do not charge an overdraft.  Outstanding customer service.

    There are some drawbacks - not open on Saturdays, only open until 5pm M-TH, until 6pm on Fridays, but they are worth the inconvenience.

    Almost like the old banking days.

    The future belongs to those who give the next generation reason for hope.
    Teilhard de Chardin

    by exmearden on Tue Dec 30, 2008 at 11:00:44 PM PST

  •  I hate BofA. n/t (1+ / 0-)
    Recommended by:
    JerichoJ8

    Do what you can with what you have where you are - Guild of Maintainers

    by bablhous on Wed Dec 31, 2008 at 01:44:21 AM PST

  •  fuck the banks (1+ / 0-)
    Recommended by:
    JerichoJ8

    wells fargo charged several $38 overdraft fees totaling several hundred dollars on a regular basis to my account. now that i am with a credit union i enjoy a one dollar fee on any overdraft. fuck banks, let em all rot and fall.

    It is blood alone that can pay the price of freedom. Give me blood and I Promise you freedom.

    by Anonarchist on Wed Dec 31, 2008 at 02:36:18 AM PST

  •  Bank of Asshattery (2+ / 0-)
    Recommended by:
    danmac, JerichoJ8

    "Prohibit manipulation of the order of posting deposits and withdrawals so as to maximize overdraft fees. (Charging the largest posting first even if it was the last thing you purchased that day so thay you pay mulitple OD fees instead one on the big ticket purchase.)"

    I kid you not, the FIRST thing that I thought of when I read this was BofA. They are so trigger happy on overdrafts. Even if one believes that a bank account is balanced they might still figure out a way to make debits bounce. BofA's creativity would make Madoff proud.

  •  Email sent - thanks for the tip (1+ / 0-)
    Recommended by:
    JerichoJ8

    Diary recommended.. this ought to be on the Rec list!

    Vegetable garden services in the Atlanta area: http://agirlandhertractor.com

    by pkbarbiedoll on Wed Dec 31, 2008 at 07:17:01 AM PST

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