U.S. banks stand to collect $38.5 BILLION in overdraft fees

There is a bill floating around in the U.S. house that will do the following:

• Require written consent from the consumer before enrollment in an overdraft loan program.


• Require financial institutions to warn the customer when an ATM withdrawal will trigger a fee -- and allow the customer to cancel the transaction at that time.


• Prohibit financial institutions from manipulating the order of check clearing or delaying the posting of deposits to increase customers' overdraft loan fees.


• Amend the Truth in Lending Act to clarify that overdraft fees are finance charges, so that annual interest rates are reported. This would allow consumers to compare overdraft loans with other credit options -- such as lines of credit, which typically offer annual interest rates of less than 20 percent.


The ODF racket needs to be exposed for what it is: a sleazy payday loan.

 

Lol. Most of the people these practices afflict don't have enough money to open a savings account nor a high enough credit score to be extended a line of credit.

 

how about mommy and daddy poweder our bottoms too?

Just because most people do it doesnt make it right nor does it give you a reason to not be responsible. Buying a home, and school loans are one thing...overdrafting your account because you can't do math or dont know how to manage money is another.

 

We've established that people should not overdraft their accounts. It still happens. Moving on, the bank has to do something on an over drafted account and it's much easier for the bank to simply pay it... they should be entitled to compensation for the loan and service. If the bank changes the terms of the agreement that you sign when you open your account, it should be openly and visibly disclosed. Payment timing shenanigans must be exposed for the public can make an informed decision about where they do business.

 

Overdraft fees are like $35 now

 

Mine are still $20, therefore the average between us is $27.50.

Get another bank if your fees are that high.

 

yes, because that's exactly what i said.

 

Not everyone has the luxury of having a couple grand extra to pad their accounts like many posters here. Many people literally live pay check to pay check. I don't have an issue with people being docked ODF's for poor accounting skills. I do have issues with the banks counting on people overdrafting, especially through their accounting schemes. Not many banks allow savings accounts to be a backup for funds. Most offer overdraft protection, but often you have to pay a yearly fee and have good credit. We're quick to give social handouts to the poor, but nobody wants to protect them from the predators.

 

Wait - what happens right now on this one? Does it say "you don't have enough money" and then charge you a fee for trying?

 

You posted about mommy and daddy powdering bottoms. Did you really expect anybody to respond to exactly what you said?

If you don't want people to infer meaning from your posts, don't make silly statements like that.

 

The people chalking this up to 'responsibility' in this thread are wholly ignorant of what it's like to be poor in this country. As if 'responsibility' was the sole rubric in something like this.

This is another example of powerful institutions picking clean the bones of those who are least able to defend themselves. This practice is as unfair and deceptive as they come.

Little punitive fees like this stack up on people and put them in a hole that's almost impossible to climb out of when you're one of the millions of people who are living paycheck to paycheck and praying that no one in your family gets sick, or that your ****ty car doesn't break down, or that the electric company doesn't up their rates, or that they don't get laid off.

And it's another reason why, with each passing year, more people who are born poor in this country are going to stay poor.

 

I figure the bill is referring to Debit Cards (where transactions will go through, even though you have pending transactions that are putting you in the red)

 

America has turned into the land of the banks, by the banks, and for the banks.

When the banks run out of money the FED just prints em some more.

When you or I run out of money the banks pick our bones dry.

 

First two make sense. I'm surprised the first isn't already standard practice as part of the account opening process -- to protect the bank!

Not really sure what the third one means. "Manipulating" is a loaded term -- and 'to increase fees' seems a difficult motive to prove. But if there are unfair practices happening here -- then, they should clear that up.

Fourth -- not sure of the implications, or how you would compute an interest rate on a flat fee for overdraft? But more disclosure would be great.

 

Actually. IT is smart Economic policy on the short term solution sort of way
If you have a 500$ overdraft
you withdraw against it for 30$ - and you can pay on it without additional charge and over a month or so . . . It does not accrue interest

Whereas . . .a 2 week payday loan is going to charge you 45$ or more
If you don't pay in two weeks the interest keeps on rolling
and in two more weeks you will owe even more

So . . . neither offer is attractive but .. . . sometimes u gotta do what ya gotta do
At least be smarter about it

Rocket River

 

I could be wrong, but I think very few of the people who have bounced check fees and actually pay the the fees are poor. Most of the poor people in this country do not have checking accounts: they live off of check cashing and cash advance businesses. If you are poor and you bounce a check, then you probably do not put anymore money in the bank to cover the fees.

I would think that those fees are mostly generated by college kids and young (teens and early 20s) working people. Unfortunately, a lot of young people do not learn any money management skills at home or in school. I know I did not and I learned my lesson. I think that if you are able to pay the penalty, then you probably earn enough to start saving a small amount to cover emergencies.