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linked from Cagey Consumer Highlights web search for Cagey Consumer Highlights

As a result of changes to Federal law, banks are now required to obtain explicit permission from account holders in order to be able to impose fees when they honor overdrafts on most transactions.

It's important to note that these new rules do not apply to pre-arranged agreements to fund overdrafts from another account, a line of credit, or a credit card. But for customers without such linked overdraft protection who opt-in under the new overdrafts, banks may introduce tiered fees, depending on the amount of money involved, and in some cases, banks may waive overdraft fees when small amounts of money are involved.

In fact, US Bank is among those that will waive overdraft fees under such conditions, as explained at the US Bank Overdraft Coverage Policy web search for US Bank Overdraft Coverage Policy. But what I find most amusing is their explanation:

We know it is sometimes difficult to track every transaction, so if your total overdrawn balance is less than $10, we do not charge you an overdraft item fee.

It's a lot easier to make a purchase using a debit card than it is to update the balance in your check register with each use. I wonder what percentage of consumers actually do that, or actually check their current balance before making a purchase. But they're going to offer me free overdrafts totaling up to $10? What kind of a joke is that?

Of course, they don't even guarantee to honor an overdraft for $10 or any other amount, so when you agree to pay the overdraft fees if they honor an overdraft, they're not actually promising to give you anything in exchange for your signature.

It's not hard to imagine a bank that would provide overdraft coverage for up to $250 and have fees that don't seem quite so punitive. People would actually buy into this, and instead of coming across as trying to trick customerx, they would come across as being innovative in meeting customer needs. It's likely that many more people would use such a service, and that the total profits generated would be greater. Instead of generating a large amount of bad press for the industry, they'd generate some press about how some banks have responded to the new regulations in a creative and useful way. Bozos!

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Revision r1.1 - 19 Jun 2010 - 17:22 by EliMantel web search for EliMantel
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