No More CFPB, No More $5 maximum overdraft fees, as 47 gets ready to repeal them.

[wing2000]

Another point, recently my wife received a check from someone who didn't have the funds. What a fiasco. Not only didn't we get the cash, we were charged because the check didn't clear. Bouncing checks, is not a harmless thing to do. Now I don't think the fee should be outlandish, but it should be enough to discourage that behavior.

IMO, charging you for someone else's negligence is an exampe of fee abuse.

As for overdraft charges overall, I think most people expect to pay a reasonable fee for overdrafting their account. However, $35 seems excessive. There are some exceptions: Bank of America - $10 and Citibank has no fee. I looked up my Credit Union's fees and was surprised to see it is $30.

Wells Fargo​

• Overdraft fee: $35
• Overdraft fee revenue: $937 million

JPMorgan Chase​

• Overdraft fee: $34
• Overdraft fee revenue: $1.1 billion

U.S. Bank​

• Overdraft fee: $36
• Overdraft fee revenue: $214 million

Bank of America​

• Overdraft fee: $10
• Overdraft fee revenue: $140 million

Citi​

• Overdraft fee: None
• Overdraft fee revenue:

Will Overdraft Fees Increase Under Trump? Here's What 7 Banks Told Us

Donald Trump, Elon Musk and the GOP want to reduce the authority of the CFPB, the agency behind a 2024 rule limiting overdraft fees.

money.com

 

[probinson]

Wells Fargo

• Overdraft fee: $35
• Overdraft fee revenue: $937 million

JPMorgan Chase​

• Overdraft fee: $34
• Overdraft fee revenue: $1.1 billion

U.S. Bank​

• Overdraft fee: $36
• Overdraft fee revenue: $214 million

Bank of America​

• Overdraft fee: $10
• Overdraft fee revenue: $140 million

That means Wells Fargo has 26,771,428 overdrafts per year, JPMorgan Chase has 32,352,941 overdrafts per year, U.S. Bank has 5,944,444 overdrafts per year and Bank of America has 14,000,000 overdrafts per year.

Why are so many people overdrafting their accounts? That's more than 79 million overdrafts per year.

 

[Aryeh Jay]

Why are so many people overdrafting their accounts? That's more than 79 million overdrafts per year.

Well, Biden did destroy the economy.

 

[durangodawood]

Why do you hate capitalism?

Let me count the ways!

I also love capitalism too. People do great things operating in properly regulated free markets.

 

[durangodawood]

That means Wells Fargo has 26,771,428 overdrafts per year, JPMorgan Chase has 32,352,941 overdrafts per year, U.S. Bank has 5,944,444 overdrafts per year and Bank of America has 14,000,000 overdrafts per year.

Why are so many people overdrafting their accounts? That's more than 79 million overdrafts per year.

Lots of people are living paycheck to paycheck. If life demands even the tiniest bit of flexibility, overdrafts are like a necessary short term micro loan.

 

[wing2000]

Lots of people are living paycheck to paycheck. If life demands even the tiniest bit of flexibility, overdrafts are like a necessary short term micro loan.

...the argument used by Sen Scott (from the op's link)

Senator Tim Scott, a South Carolina Republican and chair of the Senate Banking Committee, said last month: "Your bank account goes beyond zero, you have to pay a fee, your bills are paid. Some people will say that people who live paycheck to paycheck use their overdraft option to pay their rent.

"So, when you start capping this fee structure, you start eliminating overdraft. You start eliminating the possibility of people working paycheck to paycheck to make the decision to continue to use their resources in the most effective way."

He's inferring overdrafts would no longer be an option if the cap on overdrafts were to be implemented. I'm not so sure that is the case. In any case, I think charging people $30 is too punitive.

 

[durangodawood]

...the argument used by Sen Scott (from the op's link)

Senator Tim Scott, a South Carolina Republican and chair of the Senate Banking Committee, said last month: "Your bank account goes beyond zero, you have to pay a fee, your bills are paid. Some people will say that people who live paycheck to paycheck use their overdraft option to pay their rent.

"So, when you start capping this fee structure, you start eliminating overdraft. You start eliminating the possibility of people working paycheck to paycheck to make the decision to continue to use their resources in the most effective way."

He's inferring overdrafts would no longer be an option if the cap on overdrafts were to be implemented. I'm not so sure that is the case. In any case, I think charging people $30 is too punitive.

Interesting. But clearly some banks maintain the overdraft option at a lot less than $30. So youd think its viable.

 

[probinson]

Lots of people are living paycheck to paycheck. If life demands even the tiniest bit of flexibility, overdrafts are like a necessary short term micro loan.

If someone is habitually writing bad checks, they're skirting awfully close to fraud. It is not, and should not, be considered a micro loan.

The few times I've overdrafted my account was because of carelessness on my part. I never intentionally wrote a check that I didn't have enough money in my account to cover and thought it to be a "loan". And when I made those careless mistakes, I paid the associated fees. It was a tough lesson to learn at a time when the last thing I needed was to pay another fee, but it was still my fault. I never blamed the bank for charging the fee that I agreed to pay for an overdraft when I opened my account.

 

[Nithavela]

Over here in germany, banks usually offer a overdraft limit to their customers. If you go into the negative on your account but stay within the limit, you pay a pretty steep interest (calculated by the day). If you go over the limit, you pay an even steeper interest and then the bank might start to limit your payments or completely close down your account until you get back into the limit. There is nothing like the US overdraft fees where you have to pay 5 dollars per overdraft or something.

 

[Bradskii]

If someone is habitually writing bad checks, they're skirting awfully close to fraud. It is not, and should not, be considered a micro loan.

Do people still write cheques?

You have just enough cash in the bank to see you and your family through the month. Then your kid needs some medication. You can't not get it. So you're going to run out of money. Do you starve for the last week or use your credit card at the the supermarket so you can at least eat?

Now come Friday you'll have 4 weeks wages to effectively cover all your costs for 5 weeks. Plus you'll be hit with an overdraft fee. Feeding your family during that last week is fraud?

 

[iluvatar5150]

The few times I've overdrafted my account was because of carelessness on my part. I never intentionally wrote a check that I didn't have enough money in my account to cover and thought it to be a "loan". And when I made those careless mistakes, I paid the associated fees. It was a tough lesson to learn at a time when the last thing I needed was to pay another fee, but it was still my fault. I never blamed the bank for charging the fee that I agreed to pay for an overdraft when I opened my account.

It's not that hard to wind up in the red, even when you're being careful, if you're not in control of when certain things land in your account. Banks have been known in the past to process transaction in a way that maximizes their overdraft revenue, so it's hardly outside the realm of possibility that they're still manipulating things to their advantage.

 

[probinson]

Do people still write cheques?

Fun fact. I've NEVER had a checkbook. When my wife and I got married in 1999, I purchased a bargain bin CD-ROM of Versacheck and printed any checks I needed. In the rare cases that I need to write a check, I still use that same program today.

You have just enough cash in the bank to see you and your family through the month. Then your kid needs some medication. You can't not get it. So you're going to run out of money. Do you starve for the last week or use your credit card at the the supermarket so you can at least eat?

Been there. These are tough choices. What I never did was assume that I could just overdraft my account because of my circumstances.

Now come Friday you'll have 4 weeks wages to effectively cover all your costs for 5 weeks. Plus you'll be hit with an overdraft fee. Feeding your family during that last week is fraud?

No, I said HABITUALLY writing bad checks is skirting awfully close to fraud. No mater what your circumstances might be, if you're writing checks knowing that you don't have money in the bank to cover them, you are committing fraud.

How to Avoid Check Fraud​

For starters, don't knowingly write a bad check—it's illegal and could lead to big fines and jail time. Even if you accidentally write a bad check, you could have to pay additional fees when the check bounces.​

​

What Is Check Fraud?

Check fraud can involve someone writing a bad check, altering a check or forging a check. Here’s how to protect yourself.

www.experian.com

​

 

[probinson]

It's not that hard to wind up in the red, even when you're being careful, if you're not in control of when certain things land in your account. Banks have been known in the past to process transaction in a way that maximizes their overdraft revenue, so it's hardly outside the realm of possibility that they're still manipulating things to their advantage.

This is a different issue. I agree that banks should not process transactions in an attempt to maximize their overdraft profits. But that's a different issue than simple overdraft fees.

 

[NxNW]

Stop bouncing checks and it's a non issue.

Maybe you're too young to remember the fact that members of Congress had a bank that allowed them to bounce checks without a fee, so they were deliberately bouncing 6-figure checks to buy houses, etc. And of course, Trump refuses to pay so many of his bills it's obscene.

Why do you support two different sets of rules?

 

[Say it aint so]

That means Wells Fargo has 26,771,428 overdrafts per year, JPMorgan Chase has 32,352,941 overdrafts per year, U.S. Bank has 5,944,444 overdrafts per year and Bank of America has 14,000,000 overdrafts per year.

Why are so many people overdrafting their accounts? That's more than 79 million overdrafts per year.

I recall Wells Fargo processing payments not in the order received, but by the amount of the payment. The larger payments took precedent, and if one got to your payment sent in time but WF did not process till after the due date, they were charged a late fee. It prompted a class action lawsuit and a fine of 2 billion dollars by the CFPB just shuttled.

 

[probinson]

I recall Wells Fargo processing payments not in the order received, but by the amount of the payment. The larger payments took precedent, and if one got to your payment sent in time but WF did not process till after the due date, they were charged a late fee. It prompted a class action lawsuit and a fine of 2 billion dollars by the CFPB just shuttled.

It wasn't just Wells Fargo. This is what the previous post was talking about regarding manipulating the overdrafts to maximize profits, and I agree that is an issue. However, the topic of this thread is capping the overdraft fee. I think those are two separate (albeit closely related) issues.

 

[Say it aint so]

It wasn't just Wells Fargo. This is what the previous post was talking about regarding manipulating the overdrafts to maximize profits, and I agree that is an issue. However, the topic of this thread is capping the overdraft fee. I think those are two separate (albeit closely related) issues.

Got it. What I responded to was the question of why are so many over drafting.

 

[iluvatar5150]

This is a different issue. I agree that banks should not process transactions in an attempt to maximize their overdraft profits. But that's a different issue than simple overdraft fees.

Even if the bank isn't engaging in that specific form of manipulation, there can still be a notable lack of clarity regarding when a transaction will actually impact your account. Bills and paychecks can land on different days of the week or in different parts of the month. Merchants and payment processors can run batches at different times. Reimbursements can be processed late. etc. If we're talking about transactions with holds, that lack of clarity can extend to the size of the transactions as well.

 

[Bradskii]

Been there. These are tough choices. What I never did was assume that I could just overdraft my account because of my circumstances.

​

It doesn't sound like you've been there at all. Because you're implyimg that you wouldn't use a credit card to overdraw your account to keep your family fed. This is not an uncommon occurence for very many people.

 

[probinson]

It doesn't sound like you've been there at all.

There was a time in my life when I was behind on everything and drowning in debt. I know exactly what it's like to live paycheck to (almost) paycheck.

Because you're implyimg that you wouldn't use a credit card to overdraw your account to keep your family fed. This is not an uncommon occurence for very many people.

I'm not sure how you overdraw a credit card. If you attempt to use your card to purchase something and you don't have sufficient credit available, the transaction gets declined.