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As of 15 August, your bank can't just give a "courtesy" overdraft with your debit card.
That courtesy was always dubious, as it came with a punitive fee, and there was no way to know that it had happened, so the fees might add up.
Let me rephrase that, the fees did add up, for the banks, to the tune of somewhere between 10-15 billion dollars a year. That's an awful lot of money taken out of the economy, just so someone won't have an embarrassing moment when they discover they've forgotten how many minor swipes they've made.
It's not as if that sort of thing is accidental either. Those ad campaigns pushing one to use one's "VisaCheckCard" rather than that pesky cash, or even worse, a check, those tie into this. The idea that cash takes too long (which, trust me, as a guy who's been running a till in the modern age, cash is faster than the card. It doesn't take time to be approved).
Which goes hand in hand with things like the policy of, biggest check first (and I have read of at least one case of BofA putting a check which they were going to bounce into the ledger as a debit, thus putting the account into the red, bouncing checks which would have cleared, then finishing the act of bouncing the first check; which seems as though it ought to be fraudulent, but isn't).
So the banks are putting on a full-court press, playing on people's fears to get them to sign on and asked to be pillaged. There are some companies, such as Action Marketing which target the poor They promise to help banks (as they show a countdown timer) to register:
Millions of dollars are at stake...What will it take to get your customers to opt-in?
The clock is ticking...you know that...so how will you get stubborn overdraft users to opt-in? Have you even started?
Then we'll talk solutions. What you need to do to acquire the highest number of opt-ins, especially from the most important group — the regular NSF users.
Care to guess who those people are? It's not the rich.
BofA looks to be taking the high road. They have said they will no longer allow such overdrafts. I wonder if this isn't a cynical ploy. The people who might be more likely to, out of some sort of attenuated solidarity with the poor, protest at this sort of thing going on, esp. should there end up being a backlash against banks who continue the practice, are those who have real money to deposit.
On the other hand... the cynical side of me wonders, does Bank of America's large investment in PayDay Loan companies have anything to do with this decision? If people who have been taking advantage of having that sort of coverage, have been using it to bridge gaps (at heinous rates, some end up totaling out in the range of 3,000 percent interest; and that's if they paid off in two weeks. I don't know what the bill would look like if one went longer), might they not move to Payday lenders?
Since BofA was, as such things go, one of the better places to be, if one hit an overdrawn debit card situation. They only charged about 1,000 percent APR.
So, while I am glad BofA, as a huge bank, is forgoing this line of fleecing the public, I am still not so sure they aren't looking to make some money from low-hanging fruit, while polishing their image, and looking better than the rest of the actors in this game.
That courtesy was always dubious, as it came with a punitive fee, and there was no way to know that it had happened, so the fees might add up.
Let me rephrase that, the fees did add up, for the banks, to the tune of somewhere between 10-15 billion dollars a year. That's an awful lot of money taken out of the economy, just so someone won't have an embarrassing moment when they discover they've forgotten how many minor swipes they've made.
It's not as if that sort of thing is accidental either. Those ad campaigns pushing one to use one's "VisaCheckCard" rather than that pesky cash, or even worse, a check, those tie into this. The idea that cash takes too long (which, trust me, as a guy who's been running a till in the modern age, cash is faster than the card. It doesn't take time to be approved).
Which goes hand in hand with things like the policy of, biggest check first (and I have read of at least one case of BofA putting a check which they were going to bounce into the ledger as a debit, thus putting the account into the red, bouncing checks which would have cleared, then finishing the act of bouncing the first check; which seems as though it ought to be fraudulent, but isn't).
So the banks are putting on a full-court press, playing on people's fears to get them to sign on and asked to be pillaged. There are some companies, such as Action Marketing which target the poor They promise to help banks (as they show a countdown timer) to register:
Millions of dollars are at stake...What will it take to get your customers to opt-in?
The clock is ticking...you know that...so how will you get stubborn overdraft users to opt-in? Have you even started?
Then we'll talk solutions. What you need to do to acquire the highest number of opt-ins, especially from the most important group — the regular NSF users.
Care to guess who those people are? It's not the rich.
BofA looks to be taking the high road. They have said they will no longer allow such overdrafts. I wonder if this isn't a cynical ploy. The people who might be more likely to, out of some sort of attenuated solidarity with the poor, protest at this sort of thing going on, esp. should there end up being a backlash against banks who continue the practice, are those who have real money to deposit.
On the other hand... the cynical side of me wonders, does Bank of America's large investment in PayDay Loan companies have anything to do with this decision? If people who have been taking advantage of having that sort of coverage, have been using it to bridge gaps (at heinous rates, some end up totaling out in the range of 3,000 percent interest; and that's if they paid off in two weeks. I don't know what the bill would look like if one went longer), might they not move to Payday lenders?
Since BofA was, as such things go, one of the better places to be, if one hit an overdrawn debit card situation. They only charged about 1,000 percent APR.
So, while I am glad BofA, as a huge bank, is forgoing this line of fleecing the public, I am still not so sure they aren't looking to make some money from low-hanging fruit, while polishing their image, and looking better than the rest of the actors in this game.
