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Democrats target banks charging deadbeats overdraft fees

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  • Democrats target banks charging deadbeats overdraft fees

    In another move the Democrats have hinted at doing to get more support in 2020, they're trying to limit or remove entirely the ability of banks to charge customers that overdraft their accounts fees for doing so.

    https://www.msn.com/en-us/money/mark...cid=spartandhp

    While I can see some more 'aggressive' banks working to actively seek ways to get these fees from marginal accounts and customers and needing to be reigned in on that, eliminating such fees is equally stupid. Banks charge a fee because of bounced checks, and overdrafts where they're covering the costs even if only temporarily, and that costs them in terms of time and money. I'd also add that without such fees marginal and unscrupulous customers would take advantage of the "float" created to do overdrafts and bounce checks more often.

    https://www.msn.com/en-us/money/mark...cid=spartandhp

    I can see why banks generally charge such customers more for accounts. That being, that such customers have little or no balance much of the time but still consume bank resources often at similar rates to persons or households with much larger balances, and that such customers are more likely to end up making an overdraft or bouncing a check simply because their accounts are so small. From the bank's perspective, such customers are just an annoyance they have to put up with.

    The way I see this, is both the customer and the bank-- but mostly the customer-- are the issue here. If a customer wasn't overspending, or spending every dime they got as they got it, then there wouldn't be a problem. The bank responds to this by charging for their services because they can't make a profit off a customer that never has any cash in their bank by some other means.

  • #2
    The thing is, overdraft fees are usually done as an alternative to criminal charges...

    So I guess the DNC isn't planning on raising any campaign contributions from banks?
    Any man can hold his place when the bands play and women throw flowers; it is when the enemy presses close and metal shears through the ranks that one can acertain which are soldiers, and which are not.

    Comment


    • #3
      Originally posted by T. A. Gardner View Post
      In another move the Democrats have hinted at doing to get more support in 2020, they're trying to limit or remove entirely the ability of banks to charge customers that overdraft their accounts fees for doing so.

      https://www.msn.com/en-us/money/mark...cid=spartandhp

      While I can see some more 'aggressive' banks working to actively seek ways to get these fees from marginal accounts and customers and needing to be reigned in on that, eliminating such fees is equally stupid. Banks charge a fee because of bounced checks, and overdrafts where they're covering the costs even if only temporarily, and that costs them in terms of time and money. I'd also add that without such fees marginal and unscrupulous customers would take advantage of the "float" created to do overdrafts and bounce checks more often.

      https://www.msn.com/en-us/money/mark...cid=spartandhp

      I can see why banks generally charge such customers more for accounts. That being, that such customers have little or no balance much of the time but still consume bank resources often at similar rates to persons or households with much larger balances, and that such customers are more likely to end up making an overdraft or bouncing a check simply because their accounts are so small. From the bank's perspective, such customers are just an annoyance they have to put up with.

      The way I see this, is both the customer and the bank-- but mostly the customer-- are the issue here. If a customer wasn't overspending, or spending every dime they got as they got it, then there wouldn't be a problem. The bank responds to this by charging for their services because they can't make a profit off a customer that never has any cash in their bank by some other means.
      OTH, banks do not see any reason to pass on the profits they make from holding other people's money by holding up deposits for three working days, etc., and the fees they charge are exhorbitant, far exceeding the actual costs of doing business in the computer age.

      Most people are doing the best they can with what they have coming in, in the face of constantly increasing costs amidst frozen incomes and almost ZERO interest on any attempt to save or invest, while the banks make a tidy profit off those same savings/investments. Take a look at the CD scandal for a prize example of banking greed. CD nterest hovers around .3% with the bank expecting 3-5% off the same money.

      The real issue banks have to face is better performance on behalf of the customer who is the one paying the bills and generating their salaries and profits. Customers are like a vegetable garden - if you plan to eat from it, you'd better take very good care of it and put in the time and effort to insure the best results.
      Quis Custodiet Ipsos Custodes? Who is watching the watchers?

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      • #4
        Originally posted by Arnold J Rimmer View Post
        The thing is, overdraft fees are usually done as an alternative to criminal charges...

        So I guess the DNC isn't planning on raising any campaign contributions from banks?
        Correct in most cases.

        I don't like the 'predatory' fees charged by some banks, IIRC Bank of America was a big offender in that regard. However, the market tends to handle these to one extent or the other, I think that BoA lost a LOT of depositors to some of their predatory practices.

        If anything were to change, I think that banks should be required to note in PLAIN LANGUAGE their schedule of fees, what those fees are for, and when those fees will be charged. But some banks already do that. For instance my Credit Union lets you 'daisy chain' deposit accounts so that if you overdraft one it immediately comes out of the other with a minimal (like less than 3 bucks) fee for the emergency unplanned transfer. That lets you avoid the overdraft fee which is somewhere around 15 bucks.
        Tacitos, Satrap of Kyrene

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        • #5
          It's interesting that you can go to the desk at your local bank for a CD and get one rate and go to the next desk that says "Investment Services" and get a much higher rate. I detest banks but I do my 96 year old aunt's financial matters and she likes her bank (loyalty). I stay with my CU. I'm getting 2.75% on a 17 month CD.

          Comment


          • #6
            Originally posted by johns624 View Post
            It's interesting that you can go to the desk at your local bank for a CD and get one rate and go to the next desk that says "Investment Services" and get a much higher rate. I detest banks but I do my 96 year old aunt's financial matters and she likes her bank (loyalty). I stay with my CU. I'm getting 2.75% on a 17 month CD.
            What credit union? I bong to a Colorado State credit union, and they offer nothing like that.
            Quis Custodiet Ipsos Custodes? Who is watching the watchers?

            Comment


            • #7
              Originally posted by Mountain Man View Post

              What credit union? I bong to a Colorado State credit union, and they offer nothing like that.
              Oh, I get it now... you got into the recreational herb business did you...?

              Comment


              • #8
                Speaking of Democrats and Banks ....


                WATCH: Maxine Waters embarrasses herself trying to grill bank CEOs about student loans
                This is who leads the House Financial Services Committee?
                ...
                Rep. Maxine Waters (D-Calif.) tried to grill a group of CEOs of large banks during a House Financial Services Committee hearing, but ended up exposing a significant gap in her knowledge.

                Waters cited the numbers showing sharp increases in student loan debt over the years, which in many cases has become truly unmanageable for the borrowers. She asked them what they planned to do about the problem.

                "Who would like to answer first? Mr. Monahan, big bank?" Waters said to Bank of America CEO.

                "We stopped making student loans in 2007 or so," BoA CEO Brian Monahan replied.

                So, Waters went down the line. "Mr. Corbat?" she said to Citigroup CEO Michael Corbat.

                "We exited student lending in 2009," Corbat responded.

                Waters still hadn't caught on, and asked J.P. Morgan CEO Jamie Dimon the same question. Dimon finally explained the situation to her.

                "When the government took over student lending in 2010 or so, we stopped doing all student lending," Dimon told Waters.

                Without missing a beat, Waters quickly pivoted to the topic of small business.

                What Waters should have known: Before 2010, private banks issued federally-guaranteed student loans that were backed by the government (read: taxpayers) if they weren't repaid.

                Starting in 2010, the Obama administration thought it best to cut out the middle man, so to speak, by having the federal government issue all loans directly.

                This would've been useful knowledge for Waters to have going into a hearing with bank CEOs. Watch the exchange below:
                ....
                https://www.theblaze.com/news/watch-...t%20270%20days

                Not a positive reflection upon those whom voted for this "sack of rocks".
                TANSTAAFL = There Ain't No Such Thing As A Free Lunch

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                • #9
                  Originally posted by Arnold J Rimmer View Post
                  The thing is, overdraft fees are usually done as an alternative to criminal charges...

                  So I guess the DNC isn't planning on raising any campaign contributions from banks?

                  Comment


                  • #10
                    Waters didn't do any better on the small business question either...

                    Comment


                    • #11
                      ^^^^ Yeah, dumber than a sack full of rocks.

                      Not sure which is worse; having this sort of idiot elected, or knowing so many of the citizen/taxpayers(?)/voters voted for her ???
                      TANSTAAFL = There Ain't No Such Thing As A Free Lunch

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                      • #12
                        Originally posted by Mountain Man View Post

                        What credit union? I bong to a Colorado State credit union, and they offer nothing like that.
                        Genisys CU. It was formed from a former GM employee CU and a Unisys (Burroughs) one. They have higher rates for weird month CDs. I misspoke, it's 2.61%. https://www.genisyscu.org/Savings_Ce...53.html#tabbar

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                        • #13
                          We're not all "deadbeats" whom this happens to.

                          Most times it was an arithmetic error or forgot to record and deduct a debit transaction or such. With one of my banks I now have a small credit-line which they can tap to cover that shortage and not have to charge for the OD. IIRC, our CU can also take from our savings account to cover if such should happen.
                          TANSTAAFL = There Ain't No Such Thing As A Free Lunch

                          Comment


                          • #14
                            Originally posted by G David Bock View Post
                            We're not all "deadbeats" whom this happens to.

                            Most times it was an arithmetic error or forgot to record and deduct a debit transaction or such. With one of my banks I now have a small credit-line which they can tap to cover that shortage and not have to charge for the OD. IIRC, our CU can also take from our savings account to cover if such should happen.
                            I know, people make mistakes. But the ones the Democrats cited in the original article are pretty damn close, if not deadbeats. They're the sort that would use any "float" to their advantage. They're the sort that don't watch their spending closely or try to cajole the bank into dropping the charges much like Whimpey in the Popeye cartoons. "I'll gladly pay you Tuesday for a hamburger today..."

                            Banks--like it or not-- don't really even want such clients. They are in their eyes a nuisance and little more. I'm not trying to justify their actions, only explain them. What the US probably needs are a form of "micro-account" bank that will deal close to exclusively with such customers.

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                            • #15
                              Originally posted by T. A. Gardner View Post

                              I know, people make mistakes. But the ones the Democrats cited in the original article are pretty damn close, if not deadbeats. They're the sort that would use any "float" to their advantage. They're the sort that don't watch their spending closely or try to cajole the bank into dropping the charges much like Whimpey in the Popeye cartoons. "I'll gladly pay you Tuesday for a hamburger today..."

                              Banks--like it or not-- don't really even want such clients. They are in their eyes a nuisance and little more. I'm not trying to justify their actions, only explain them. What the US probably needs are a form of "micro-account" bank that will deal close to exclusively with such customers.
                              Which would then be blasted for "discrimination", same reason banks are forced by the Feds to grant bad mortgages to certain groups.
                              Quis Custodiet Ipsos Custodes? Who is watching the watchers?

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