For those banks not doing away with these fees, the Federal Reserve's new opt-in rules on debit cards are due to come into effect on July 1, 2010. The Federal Reserve’s Final Rules came down on the side of the consumer on many issues. Because the Truth-in-Lending Act applies to credit cards, but does not apply to debit cards, the Federal Reserve’s Final Rules are under the Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) (EFTA). The thrust of the Final Rules is primarily disclosure and consent based, rather than tackling some of the troublesome banking practices involved in the processing of overdrafts for enrolled customers and the amount banks charge for overdraft services. Specifically, the Final Rules ensure that:
(1) banks cannot enroll customers in overdraft services for ATM and one time debit card transactions without their consent (an opt-in);The Final Rules specifically declined proposals regarding the practice of debit card holds, suggesting instead that banks, networks, and merchants should address this problem.
(2) banks do not condition the payment of overdrafts on other items, such as checks and ACH transactions, on the customer opting-in for ATM and debit card services and cannot decline overdrafts on checks and ACH transactions for this reason;
(3) banks provide the same account terms, conditions and features to customers whether or not they opt-in; and
(4) the opt-in approach applies to existing and new accounts beginning July 1, 2010.
With any luck, we'll see other large banks doing away with the debit and ATM overdrafts over the coming months. Seems easy enough just to deny the transaction at the counter. Not sure I'd say this, but good job Bank of America.
- JSM
Cf. David Lazarus in yesterday's Los Angeles Times:
ReplyDelete"I mean, is that how miserable things have gotten, that we honor businesses just for doing the right thing? That we reward them for saying they'll quit doing something they never should have done in the first place?"
The full article is here: http://www.latimes.com/business/la-fi-lazarus16-2010mar16,0,2515781,full.column
And what has BofA done? They have implemented a ridiculous overdraft strategy where if you "opt out" of overdraft protection, they will decline transations AND CHARGE a $35 dollar fee. Here's the link:
ReplyDeletehttp://learn.bankofamerica.com/products/money-management/overdraft-under-control.html?cm_sp=DEP-Checking-_-Free%20Checking-_-DCT6HM90_ods-123_mh_control_ara5l1n1.jpg
I've been a customer for 20 years, and I closed my BofA account. Sheisters.
I've been interested in this topic for some time now. I feel like the financial industry intentionally takes advantage of the disadvantaged. I've concocted a short (2 question) survey to look specifically at overdraft fees and level of income.
ReplyDeleteWould you mind terribly if I leave this comment soliciting responses from your readers?
The instructions are simple:
1) Take the survey
2) Give these instructions to everyone you know
Thanks a million,
Patrick Caldwell