Consumerism Commentary - Latest Comments in Senator Dodd Going Ahead With Overdraft Legislation

Re: Senator Dodd Going Ahead With Overdraft Legislation

Scott — Wed, 03 Feb 2010 00:16:43 -0000

So where do you draw the line. What's to say banks can't charge a $500 overdraft fee for buying a $2 burrito? I understand people need to be responsible, but the way the banks are approaching this is the equivalent of giving someone life in prison for stealing a pack of gum. Does it seem fair if you have a $98 balance in your account and then you make transactions of $98, $1, $1, $1, and $1 that you will incur overdraft fees of $140? I don't think so.

Re: Senator Dodd Going Ahead With Overdraft Legislation

joshfcb — Thu, 22 Oct 2009 12:21:15 -0000

As a banker, I believe this proposed legislation with have some dramatic negative side effects that are not being discussed. While yes, this legislation will be good for the consumers who continually live beyond their means and and are constantly overdrawn, however, if this is passed, as a business owner also, it is likely that I will refuse to take checks period.

The $38 billion that banks will be making on OD fees pale in comparison to the probably double that the individual business would make off returned check fees. At our bank, the philisophy has always been that if you are gonna overdraft do you want to pay us $24 for taking the chance on you clearing it up or would you rather get your electricity turned off and pay the $150 reconnection fee or have your name on a "do not take checks list" at the local grocery store. In addition, the business owners in our area are not set up to collect these bad debts very well. THe last thing they want is a bad check.

Our governments efforts to shield the "uneducated" consumer from theirselves is only pushing business to the edge of bankruptcy. No one forces the consumer to overdraft an account. Financial prosperity is not hard. SPEND LESS THAN YOU EARN!!!!

Re: Senator Dodd Going Ahead With Overdraft Legislation

SavingEverything — Wed, 21 Oct 2009 23:04:55 -0000

This may be off topic, but, PNC (and National City) also offers "Opt Out" for accountholders; they have to call though to opt out. Also, think about the impact this could have on credit unions and regional and small banks that offer rewards checking accounts with high yields. It could mean less profit for all banks, and lesser rewards for consumers.

Re: Senator Dodd Going Ahead With Overdraft Legislation

Anonymous — Tue, 20 Oct 2009 19:55:37 -0000

You are exactly right in your first paragraph. Even if we ignore the glaring elephant in the room called "personal responsibility" that says that people that don't like overdraft fees should manage their money responsibly and not overdraft their accounts then there is still the issue that the banks are providing a legitimate service to account holders in covering all of those overdraft charges and should be compensated. When someone overdrafts their account by $100 then that $100 has to come from somewhere. It is perfectly reasonable for the bank to charge a fee for the overdraft service.

Re: Senator Dodd Going Ahead With Overdraft Legislation

Matt_SF — Tue, 20 Oct 2009 18:14:44 -0000

I'd say it's the best thing Dodd has done in 2009 to protect his Senate seat against the oncoming election battle with Peter Schiff.

Re: Senator Dodd Going Ahead With Overdraft Legislation

Clf — Tue, 20 Oct 2009 17:45:56 -0000

I agree that I should have less fees and APR when I'm banking IF I have taken care of business and paid all my bills.

But anyway, before I digress any further - in the long run can we REALLY trust just another "Friend of Angelo"??

Re: Senator Dodd Going Ahead With Overdraft Legislation

Dan — Tue, 20 Oct 2009 11:12:37 -0000

Smithee, first, I want to touch on your comment about how it's not right to profit because someone else fails. You and I have access to free checking because someone else is paying the freight. I'm fairly certain that if the banks are severely limited in charging overdraft fees, you and I will have to pay for it. And I WON'T go out on a limb and say that I am willing to pay more for certain services so that someone who can't manage their finances won't be charged as much.

I think some parts of the legislation are better than others. I'd say limiting the fees to once per day is appropriate... that way, the order in which transactions are cleared aren't even an issue. Covering overdrafts *is* a service to the customer. In the old days, a bank would simply bounce a check and charge you a nasty fee for it. Also, I just went shopping at the grocery store the other day, and Harris Teeter now charges $50 for each returned check. (That's $50 plus what your bank would charge.) Ouch. And at the apartment I rented in college (decent place, not a slum) if you bounced a check, you could forget about paying your rent by check again.

I am for the parts of the legislation that say a bank can't count "holds" (or whatever you want to call it) against you. And as far as paper checks clearing -- a deposit should be a deposit.

I'm all for letting the banks profit. Let them clear transactions and make some money. Perhaps a better compromise is a single daily charge (say $30) and then a smaller, per item fee (say $5.)