Overdraft fees

[sandyclaus]

What is the name of your state (only U.S. law)? SC

Last I checked, the purpose for charging an overdraft fee is because the bank covered a charged for which there was insufficient funds in an account . Can banks assess fees for insufficient funds if the bank declined to cover an incoming charge?

Yes. One would be considered an Overdraft fee (item paid against insufficient funds, resulting in an overdraft, or negative balance, in your account) and one would be considered a NSF/Returned Item fee (insufficient funds, item not paid and returned).

Either way they have to process the transaction, and so they still charge you according to what was (or was not) done. Welcome to the world of finance.

 

[Antigone*]

What is the name of your state (only U.S. law)? SC

Last I checked, the purpose for charging an overdraft fee is because the bank covered a charged for which there was insufficient funds in an account . Can banks assess fees for insufficient funds if the bank declined to cover an incoming charge?

Yes the can and if you don't like it use cash. You can't spend what you don't have.

 

[BanksSuck]

That was a test, my scenario was based on an Instant Transfer of funds. You both failed miserably.

Overdraft [NSF] protection covers transactions that exceed the balance of your bank account. Based upon the new consumer finance rules passed by congress, a bank can only charge the fee IF the bank covers the difference, and you have opted in for overdraft protection [debit cards]. The new rules do not apply to checks or automatic bill payments. Banks may still automatically enroll you in standard overdraft protection for these services. You have to call your bank to opt-out of overdraft protection on checks and automatic bill payments.

If a bank declines a transaction for insufficient funds, it can not charge you the fee.

I suggest you both check out the Consumer Financial Protection Bureau [consumerfinance.gov] - there are PDFs that you can download that will educate you on overdraft fees, the Office of the Comptroller of the Currency [occ.gov], or HelpWithMyBank.gov.


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I bet most attorneys know that, if you don't already know the answer - don't ask the question. However, if you don't know the answer to a question - never open mouth and insert foot.

 

[Antigone*]

That was a test, and you both failed miserably.

Overdraft [NSF] protection covers transactions that exceed the balance of your bank account. Based upon the new consumer finance rules passed by congress, a bank can only charge the fee IF the bank covers the difference, and you have opted in for overdraft protection [debit cards]. The new rules do not apply to checks or automatic bill payments. Banks may still automatically enroll you in standard overdraft protection for these services. You have to call your bank to opt-out of overdraft protection on checks and automatic bill payments.

I suggest you both check out the Consumer Financial Protection Bureau [consumerfinance.gov] - there are PDFs that you can download that will educate you on overdraft fees, the Office of the Comptroller of the Currency [occ.gov], or HelpWithMyBank.gov.

If you want to test people, you need to be more specific. You said a charge. A charge can be a debit, electronic payment or check.

The bank will charge an NSF or OD fee is the check comes in and there are not enough funds. That is a declination of a charge.

So who failed now

 

[BanksSuck]

The scenario is not relevant.

You must have missed the part where the banks CAN'T charge the fee UNLESS they cover the charge. They don't pay the charge - there is no fee.

Read about changes to overdraft policies and new protections for checking accounts from the OCC:

http://www.occ.gov/news-issuances/psa/new-overdraft-protection-rules.pdf

 

[Antigone*]

The scenario is not relevant.

You must have missed the part where the banks CAN'T charge the fee UNLESS they cover the charge. They don't pay the charge - there is no fee.

Read about changes to overdraft policies and new protections for checking accounts from the OCC:

http://www.occ.gov/news-issuances/psa/new-overdraft-protection-rules.pdf

You were not clear in your so-called test. Now you will be ignored. Your foolishness is not worth the effort of the volunteers on this website.

 

[BanksSuck]

Even as a volunteer, you shouldn't be providing advice if you don't know what you are talking about. What you offered was an uninformed opinion. Based on what I have read here in the past, 90% of the people here, such as yourself, offer opinions peppered with carping, as if the only people with skeletons in their closet are those asking a question. You don't know me, but offered your opinion with snide comments.

 

[swalsh411]

I'll be ignoring you to.

 

[antrc170]

What is the name of your state (only U.S. law)? SC

Last I checked, the purpose for charging an overdraft fee is because the bank covered a charged for which there was insufficient funds in an account . Can banks assess fees for insufficient funds if the bank declined to cover an incoming charge?

The answer to your question is yes the banks can charge a fee. The bank still have authority to charge a fee against the user for recurring charge transactions such as a membership or club dues. The protection against being charged a fee deals with one time, non-reaccuring transactions. Re-curring transactions are still subject to fees. In fact, if the bank fails to process a re-curring transaction they may find themselves out of compliance. I've included a link to BoA and another blog with a good discussion on the matter.

Your lack of clarity in asking a complex question gave rise to a lot of confusion which resulted in the answers you recieved. The failure is on your part to adequetly explain the scenario you were wanting to test. Antigone*of*Greece and Sandyclaus are both knowledgable members of this forum and will no doubt continue to provide solid advice in the future.

http://learn.bankofamerica.com/products/money-management/take-charge-of-your-transactions.html
http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1380733

 

[BanksSuck]

Really. You are going to use BoA as an example?

BoA does not get to thwart law. The only time overdraft fees apply is when a customer did not opt-out of the protection for checks and automatic bill payments.

 

[antrc170]

"Debit card transactions that you have established for recurring payment (such as utilities or club memberships) may continue to be authorized at our discretion, even if you do not sign up for Debit Card Overdraft Service."

If you prefer I also provided the language Wachovia, dba Wells Fargo uses as well. I could go on, but to save myself the headache I won't.

To say that fees NEVER apply unless you opt-out of the protection is, well, plain wrong! As I have pointed out on several occasions, that as a general rule the fees do not apply. However, recurring debts against the account such as a dues, membershipts, etc are still subject to the fees. That's not my interpretation or guess, that is the law. Sorry to burst your bubble. Neither Wachovia or BoA is thwarting the law in this scenario.

https://www.wachovia.com/foundation/v/index.jsp?vgnextoid=f2625cbc26f18210VgnVCM100000617d6fa2RCRD&vgnextfmt=default

 

[BanksSuck]

"Debit card transactions that you have established for recurring payment (such as utilities or club memberships) may continue to be authorized at our discretion, even if you do not sign up for Debit Card Overdraft Service."

If you prefer I also provided the language Wachovia, dba Wells Fargo uses as well. I could go on, but to save myself the headache I won't.

To say that fees NEVER apply unless you opt-out of the protection is, well, plain wrong! As I have pointed out on several occasions, that as a general rule the fees do not apply. However, recurring debts against the account such as a dues, membershipts, etc are still subject to the fees. That's not my interpretation or guess, that is the law. Sorry to burst your bubble. Neither Wachovia or BoA is thwarting the law in this scenario.

https://www.wachovia.com/foundation/v/index.jsp?vgnextoid=f2625cbc26f18210VgnVCM100000617d6fa2RCRD&vgnextfmt=default

Read post #3 again.

 

[echogirl3142]

@BanksSuck

1. a direct link to the document you are getting your information from would be wonderful...I would "love" to peruse its contents

2. you are wrong.

3. you also never specified the TYPE of institution that your "test" was occurring at...which in the least defines what federal policies are actually applicable.

k thanks.