October 1st, 2009 
admin We’ve written about overdraft banking fees before, and they way the abuse the system to milk maximum fees. So numerous and loud were consumer complaints that Congress has responded with proposed bills in the House and Senate. The Federal Reserve is also being pressured to issued new rules. This has the banking industry quaking in their boots.
In a remarkable coincidence, starting Oct. 19, you will be seeing some changes from several banks in the way they charge overdraft fees.
- Bank of America and JP Morgan Chase customers will be able to choose to void a sale or an ATM withdrawal that would exceed the amount in their checking accounts right at the point of sale.
- Bank of America has also agreed that it will no longer charge overdraft fees on accounts less than $10 in the red. It also will limit the number of overdraft fees to four a day per account, down from 10.
- Wells Fargo will charge no more than four overdraft fees per day.
- J.P. Morgan Chase went even further. It will limit the amount of overdraft fees to three a day.
- Chase and Wells Fargo announced that it will no longer charge any fee for accounts that are overdrawn by $5 or less.
- Starting next year, Chase won’t pay debit card overdrafts and charge a fee without consumers’ consent.
The banks efforts to modify their overdraft policies have failed to impress lawmakers, including powerful Senate Banking Committee Chair Chris Dodd, D-Conn., who is preparing legislation to crack down on what he calls a pattern of abusive practices.
“Excessive, automatic overdraft fees are forcing many American families deeper into debt at a time when they are already struggling to make ends meet,” he said. “I am working on a bill to protect consumers from these fees,” says Dodd.
Rep. Carolyn Maloney, D-N.Y., sponsored a bill requiring banks to get consumers’ permission to pay an overdraft, and charge a fee, and clear transactions in chronological order. The Federal Reserve is also under pressure to crack down on industry overdraft practices. The Fed has said it plans to issue a rule by the end of the year.
Have you been hit with overdraft fees? Do you think the banaking laws should be modified? Leave us a comment!
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