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Is there a legitimate reason banks do this?

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  • Is there a legitimate reason banks do this?

    Saw something sad during my morning bank visit. From the office I heard what sounded like the bank manager shaking some people down for overdraft money or rather they already had and the Wicked B of the West was simply dictating how they could have that money back when they pried it from her cold dead hands.

    Now I understand banks need to discourage people pushing their accounts into the red. I totally support using a fee system to incentivize keeping your books balanced. Because the bank can't be covering mass irresponsibility.

    But here's where I have my problem. From what I overheard the overdraft occured because a deposit and withdrawl didn't line up. They put some money in and then wrote a check to someone, who cashed it the same day and BOOM, overdraft. Those poor people had my sympathy, I've had that happen to me before I learned not to trust a banker to show decency or even logic.

    The deal is that banks, or at least Martinsburg Bank, process withdrawls immediately as in right that very second, but the deposit they absolutely will not register until midnight on the computer. With the result being that a person could very well deposit a million dollars into a zeroed out bank account, withdraw ten cents two hours later, and overdraft. With fees. Even though their bookkeeping was totally on target.

    Now like I said I support responsible bookkeeping. But what happened there was a beauracratic miscarriage. If what the customer said was true, he had his books balanced.

    And my question is: is there a good reason for banks doing this? Because it looks like ery to me. To process withdrawls the moment they occur and to process deposits the moment they occur - that makes sense. To simply not process any deposits or withdrawls electronically until midnight where they all process at the same time - that makes sense too. But I just don't see the rational reason why you would process withdrawls instantly, but not deposits. I see two alternatives: laziness (a virtue I have often seen in bankers as those guys take every holiday from here to France off even when the factories are open) or corruption in which they deliberately do things that way, TRYING to glean money off of people with precarious balances (which I also wouldn't put past them).

    Again, I'm no socialist. If they were fining people for reckless spending, that would be one thing. But this ain't it. They're using a system which can nail even people who DO keep their books in order.

    Is there some legitimate reason for this practice I am unaware of? Or are they just rolling their customers?
    A new life awaits you in the off world colonies; the chance to begin again in a golden land of opportunity and adventure!

  • #2
    Many years ago I worked as a Teller in a bank. I started writing up a list of people that should be automatically have their deposits noted. Each morning the Bank supervisor would get a list of people that had overdrawn their accounts. Some he would okay, some he would deny. This was back in the bad old days, 1976!

    Nowadays only cash deposits get automatically put into an account. This is where the people screwed up! They should have cashed whatever check they wanted to deposit and then deposited the cash!

    Pruitt
    Pruitt, you are truly an expert! Kelt06

    Have you been struck by the jawbone of an ASS lately?

    by Khepesh "This is the logic of Pruitt"

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    • #3
      It takes time for checks deposited into Martinsburg Bank and written on other banks to clear. It also takes time for Martinsburg Bank checks deposited at other banks to clear.

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      • #4
        Sucking every second out of a deposit. What they have on hand, deposits, but are not yet add to the account can be used else where even if only for a few minutes to a couple of days. All my US income comes in the form of direct deposit. If the last day of the month falls on Friday those deposits don't show up until Monday on my account. Where are those funds for the weekend? No proof but I'm sure the bank is using them for their benefit and not mine. However I have excepted the system. I see how it works and check my account to see what is available before writing a check. ????Do people still write checks? Sad story on the one side but they have only themselves to blame.

        Oh, for what it is worth for some deadheads, I also am not a socialist. I do however see some positives in a more social society than we have in the US.
        "Ask not what your country can do for you"

        Left wing, Right Wing same bird that they are killing.

        you’re entitled to your own opinion but not your own facts.

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        • #5
          Banks earn interest daily on the sum total of money they have, so they don't let go of it until they have to.
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          • #6
            Originally posted by Half Pint John View Post
            Sucking every second out of a deposit. What they have on hand, deposits, but are not yet add to the account can be used else where even if only for a few minutes to a couple of days. All my US income comes in the form of direct deposit. If the last day of the month falls on Friday those deposits don't show up until Monday on my account. Where are those funds for the weekend? No proof but I'm sure the bank is using them for their benefit and not mine. However I have excepted the system. I see how it works and check my account to see what is available before writing a check. ????Do people still write checks? Sad story on the one side but they have only themselves to blame.

            Oh, for what it is worth for some deadheads, I also am not a socialist. I do however see some positives in a more social society than we have in the US.
            I still write checks on occasion but a book will last me over a year. Yeah this is the age of debit.

            Unless identity theft drives us back to paper.
            A new life awaits you in the off world colonies; the chance to begin again in a golden land of opportunity and adventure!

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            • #7
              Originally posted by Pirateship1982 View Post
              I still write checks on occasion but a book will last me over a year. Yeah this is the age of debit.

              Unless identity theft drives us back to paper.
              My checks have turned yellow. I may write one once a year.
              "Ask not what your country can do for you"

              Left wing, Right Wing same bird that they are killing.

              you’re entitled to your own opinion but not your own facts.

              Comment


              • #8
                I think some banks business practices border on the criminal

                my technique in dealing with financial institutions that do that kind of thing is to move my stuff to a competitor..

                I just found out the Brokerage holding my IRA is going to lose my account because they decided it cost them too much money to hold any deposits under $10,000.
                Human beings are the only creatures who are able to behave irrationally in the name of reason.

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                • #9
                  Our bank, Boeing Employee Credit Union, will run smaller withdrawals before bigger ones when the account balance gets low so as to avoid NSF charges. It's one of the reasons we still bank with them.
                  If you can't set a good example, be a glaring warning.

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                  • #10
                    Banks seem to be using every angle they can to stick it to its depositors. Fees that once were a few dollars cost $20 or more these days. Anyone still using paper checks pays through the nose for them--the bank may advertise free checking but four boxes of printed checks will cost over $125.
                    "I have never known a combat soldier who did not show a residue of war." --Sergeant Ed Stewart, 84th Division, US Army, WWII

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                    • #11
                      Originally posted by Half Pint John View Post
                      Sucking every second out of a deposit. What they have on hand, deposits, but are not yet add to the account can be used else where even if only for a few minutes to a couple of days. All my US income comes in the form of direct deposit. If the last day of the month falls on Friday those deposits don't show up until Monday on my account. Where are those funds for the weekend? No proof but I'm sure the bank is using them for their benefit and not mine. However I have excepted the system. I see how it works and check my account to see what is available before writing a check. ????Do people still write checks? Sad story on the one side but they have only themselves to blame.

                      Oh, for what it is worth for some deadheads, I also am not a socialist. I do however see some positives in a more social society than we have in the US.
                      I still write checks.................if for no other reason than to make the bank process em........and it gives me written proof............

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                      • #12
                        Originally posted by Greybriar View Post
                        Banks seem to be using every angle they can to stick it to its depositors. Fees that once were a few dollars cost $20 or more these days. Anyone still using paper checks pays through the nose for them--the bank may advertise free checking but four boxes of printed checks will cost over $125.
                        your right about that. However I just opened an account with the wife at a local bank and they charge way less than the other nationally known chain I have another account in.

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                        • #13
                          Originally posted by Pirateship1982 View Post
                          Saw something sad during my morning bank visit. From the office I heard what sounded like the bank manager shaking some people down for overdraft money or rather they already had and the Wicked B of the West was simply dictating how they could have that money back when they pried it from her cold dead hands.

                          Now I understand banks need to discourage people pushing their accounts into the red. I totally support using a fee system to incentivize keeping your books balanced. Because the bank can't be covering mass irresponsibility.

                          But here's where I have my problem. From what I overheard the overdraft occured because a deposit and withdrawl didn't line up. They put some money in and then wrote a check to someone, who cashed it the same day and BOOM, overdraft. Those poor people had my sympathy, I've had that happen to me before I learned not to trust a banker to show decency or even logic.

                          The deal is that banks, or at least Martinsburg Bank, process withdrawls immediately as in right that very second, but the deposit they absolutely will not register until midnight on the computer. With the result being that a person could very well deposit a million dollars into a zeroed out bank account, withdraw ten cents two hours later, and overdraft. With fees. Even though their bookkeeping was totally on target.

                          Now like I said I support responsible bookkeeping. But what happened there was a beauracratic miscarriage. If what the customer said was true, he had his books balanced.

                          And my question is: is there a good reason for banks doing this? Because it looks like ery to me. To process withdrawls the moment they occur and to process deposits the moment they occur - that makes sense. To simply not process any deposits or withdrawls electronically until midnight where they all process at the same time - that makes sense too. But I just don't see the rational reason why you would process withdrawls instantly, but not deposits. I see two alternatives: laziness (a virtue I have often seen in bankers as those guys take every holiday from here to France off even when the factories are open) or corruption in which they deliberately do things that way, TRYING to glean money off of people with precarious balances (which I also wouldn't put past them).

                          Again, I'm no socialist. If they were fining people for reckless spending, that would be one thing. But this ain't it. They're using a system which can nail even people who DO keep their books in order.

                          Is there some legitimate reason for this practice I am unaware of? Or are they just rolling their customers?
                          Banks begin drawing their interest on your money the moment they deposit it themselves. Thus, they have ZERO interest in giving it to you any faster than they have to.

                          The proof? Banks will still do this even if you deposit a Certified Bank Draft or Certified Check, which doesn't need to wait to be "cleared" by anyone, and modern electronic bookkeeping verifies funds available immediately no matter how you make your deposit.

                          My banks and I have discussed this a couple of times, and if I don't like the answer, I move my money elsewhere. I'm the customer, their business is entirely about ME, and I make sure they remember that.

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                          • #14
                            Originally posted by Mountain Man View Post
                            Banks begin drawing their interest on your money the moment they deposit it themselves. Thus, they have ZERO interest in giving it to you any faster than they have to.

                            The proof? Banks will still do this even if you deposit a Certified Bank Draft or Certified Check, which doesn't need to wait to be "cleared" by anyone, and modern electronic bookkeeping verifies funds available immediately no matter how you make your deposit.

                            My banks and I have discussed this a couple of times, and if I don't like the answer, I move my money elsewhere. I'm the customer, their business is entirely about ME, and I make sure they remember that.
                            I fired US Bank when they wouldn't stop d---ing around. I'm on board with that.
                            A new life awaits you in the off world colonies; the chance to begin again in a golden land of opportunity and adventure!

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                            • #15
                              Originally posted by Pirateship1982 View Post
                              I fired US Bank when they wouldn't stop d---ing around. I'm on board with that.
                              I had major issues with US Bank to.

                              I closed my account with them when they refused to cash my paycheck because I preferred to use cash instead of debit cards to pay for things. That way I didn't have to worry about overdrafts. Mind you they had been cashing my paychecks for years when they suddenly refused to do it any longer.

                              They actually told me they wouldn't cash my paychecks anymore unless I deposited it into my account first and then withdrew it from the ATM.

                              This was after banking with them for about 15 years.

                              I told them to stick it up their ass and immediately closed my account.
                              Last edited by Captain General; 31 Dec 12, 13:30.
                              "The blade itself incites to deeds of violence".

                              Homer


                              BoRG

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