Has this ever happened to you? You make a deposit or transfer funds from another account to cover transactions to your checking account. The transactions are successful and you are clear. A day or so later you notice that the bank has dinged you for overdraft fees sometimes upwards of $35.00 per overdraft. In this age of online banking and electronic transactions, consumers increasingly depend on their online statements as opposed to a manual checking register to manage day-to-day finances. Unfortunately due to the banking industry’s deliberate attempts to cause conusmers to overdraft, it is only a matter of time before everyone gets dinged. Since overdraft fees account for billions of dollars in revenue, banks have an incentive to create rules and complex formulas to cause consumers to overdraft. This seems to be more prevalent with the large corporate banks like Bank of America and Wachovia. We bank at a small credit union and it makes a world of difference. Contrary to what banks say, consumers would rather know that their account is about to overdraft before hitting the submit button on the ATM key pad.
The Federal Reserve Board has taken notice to this practice because it is just as predatory as those pay day or title loans with interest upwards of 1000 percent. The board is considering rules that would require consumers to opt in to overdraft service and approve overdraft fees before completing the transaction. The proposed law is open for public comment until March 30, 2009. Please visit the site and add your voice. Following are the options for viewing the law compliments of an article,”Overdraft fees more than many bank on,” on this topic by Carrie Teegardin at The Atlanta Journal-Constitution:
REGISTER YOUR OPINION WITH THE FED
The Federal Reserve Board will take public comments on its proposed rules for overdraft services until March 30.
To review what the Fed is considering, check out the board’s notice in the Federal Register:
Read a summary from Consumers Union:
Read public comments already submitted:
Register your public comment:
http://www.federalreserve.gov/generalinfo/FOIA/ProposedRegs.cfm (SELECT REGULATION E, Electronic Fund Transfers
For an easy to use comment interface for those who favor the opt-in proposal: