Those @$#% Bank Fees
Posted by George Pasley on October 13, 2009
Ok, who didn’t see this one coming? The government is currently reviewing the whole overdraft policy that banks and credit unions have been enjoying over the years. Consistent complaining and the current state of the economy have driven the issue to the forefront.
From a consumer standpoint, I wholeheartedly agree that the fees are a bit excessive. But what gets my goat is charging me for transferring money from my secondary account to cover the overdraft.
While banks and credit unions made $24 billion last year in overdraft fees, I’d bet they waived at least that much, if not more. I always felt that if they were more consumer friendly, they’d probably make more in fees.
So here’s my suggestion on what the industry can do to be more “caring” and keep a majority of that generated overdraft fee income.
- Process all deposits to accounts first
- Process check items, bill pays and card purchases in the order they are received OR from smallest to largest
- If there is an overdraft, allow the draft to come from another checking, savings or ACR/LOC account, penalty free
- If there is no account set up, or the draft account is used up, charge 10-25% of the amount per item, with a cap of $35 per item.
Now I haven’t seen any industry statistics, but from what I’ve seen here, most items that cause an overdraft are for less than $100. Charging $2.50 for a $10 bounced check will get you a lot less calls and irate customers than charging $35. Also, most people won’t even argue over a 10-25% fee. They will probably look at it as a foreign ATM charge, a convenience fee.
